Chinese Whales Are Using Tether to Invest in Bitcoin

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China Uses Tether for Bitcoin Investing

The gateway to one of the largest markets in the world has been closed since September 2017. In addition, Hong Kong is becoming increasingly regulated by the Chinese government cutting access to the crypto market fully. This makes investing into cryptocurrency troublesome, costly, and time consuming. Any investor currently looking to enter the market from China, must be quite wealthy and have the time to dedicated to it. Specifically, those wealthy investors are using the stablecoin, Tether.

Tether stablecoin

Regardless of the recent investigation by the New York Attorney General and change of service terms made by the Tether team, there seems to be an overwhelming amount of trust placed in the project as a whole. With a retracement currently happening in the market, investors globally seem to be fine with hedging into Tether to capture gains or trade for Bitcoin.

Chinese Whales are Utilizing Tether

Specifically, in China, Tether trades are up tremendously. The controversial stablecoin is surging as an investment tool for OTC whales to purchase Bitcoin and other top assets. This year alone in China, Tether volume is up over $10 billion before the mid of June. Last year the entire 2018 Tether trading volume amounted to only $7 billion in the same region.

For China, investors will begin their investment in the stablecoin Tether through domestic over the counter deals with brokers. The brokers or even just the investors will take their stablecoins to foreign markets overseas to exchange for Bitcoin, Ethereum, and other top projects.

Bitcoin Accumulation

Due to this and Tether at all time highs in the region, we can expect Chinese investors to be accumulating Bitcoin at rapid rates. A statistic from Diar shows that 42% of Bitcoin wallets with over 200 BTC per wallet, have not shown movement since pre 2017 highs. Ironically, these wallets have all seen deposits meaning Bitcoin is being constantly accumulated by these heavy hands.

Over 55% of Bitcoins currently sit in wallets that have balances upwards of 200 coins – worth over $1Mn at any point in time within the last 11 months when the price of Bitcoin breached the $5k mark. And impressively, 1/3 of the Bitcoins that are sitting in these wallets, have never made an outgoing transaction, which, outside of exchange wallets could indicate either lost private keys, lowering real supply, or a very strong resolve by cryptocurrency believers. – Diar

Likewise, recent reports have keyed into the OTC market, stating that billionaires are looking to buy out up to 25% of the entire Bitcoin supply. Highly unlikely that this is even possible, but the sentiment of rich turning to digital assets is quite appealing for the market.

Combining this information with the on going Tariff trade wars going on between the US, China and multiple other countries, and you have a recipe for crypto dominance. Many professional traders in the space highly believe that given an economic recession, Bitcoin will surge in buyer confidence due to its natural hedge against the market portfolio. The traditional market has been on a rip upwards since 2008, which means a retracement should happen in the coming years.

US Sentiment

For the US, there has been a noticeable decrease in investors hedging into Tether after the debacle. Although, this could be due to multiple reasons such as an increase in available stablecoins, fake trading on exchanges, or change of reserve philosophy. Therefore, a clear correlation cannot be drawn at this point.

What is clear is the cynicism from the New York Attorney General and other congress members of the crypto Market. With every crypto mom, there seems to be 5 more naysayers ready to pull the plug anyway possible.

Moving forward, as Bitcoin dominance surges in the coming years and competition with a starving market heightens, anonymity may become worth more than originally anticipated.