Whales pull $4 billion stablecoins out of exchanges, is this a sell signal hinting at a catastrophic crash?

• There have been eight Tether transfers valued at $1 billion or more of which four have occurred within the past ten days. 
• Whales are pulling their USDT out of exchanges at a rapid pace, in response to bank collapse and stablecoin de-pegging concerns. 
• Stablecoin on exchanges represent buy side demand, it is likely that USDT’s removal from exchanges is therefore a sell signal. 

Analysts at crypto intelligence tracker Santiment identified four Tether (USDT) transfers valued at $1 billion or more within the past 10 days. In response to the tumultuous events of the past week, including the collapse of several crypto-friendly banks and stablecoin de-pegging, large wallet investors are pulling USDT out of exchanges. 

Stablecoins typically represent demand side liquidity, therefore removal of Tether from exchanges is considered a sell signal. 

Also read: Here’s why $25 billion in crypto in Dogecoin, Zcash and 280 other blockchains is at risk

Tether leaves exchanges at fast pace, is this a sell signal?

Analysts at Santiment noted large volume Tether transfers valued at $1 billion or more within the past ten days. Whales are moving USDT out of exchanges at a fast pace, in response to the bank collapse and USDC de-pegging concerns. 

Tether whales pull out USDT from exchanges

Since stablecoin reserves on exchanges typically represent the demand for cryptocurrencies like Bitcoin, the decline in stablecoin reserves could be perceived as a sell signal. Further, smaller stablecoin reserves on exchanges imply reduced buying pressure on assets like Bitcoin, negatively influencing its price. 

Tether’s minting of $2 billion USDT tokens raises alarm

The largest stablecoin by market capitalization, Tether minted a whopping $1 billion USDT tokens on Ethereum and Tron blockchains on Wednesday. The stablecoin’s market capitalization climbed from $72.1 billion to $74.6 billion between March 12 and March 14, raising alarm among crypto investors. 

CTO Paolo Ardoino clarified that the $2 billion minted on Ethereum and TRON blockchains were not issued transactions and will be used as inventory for the next period issuance. Find out more about this here: Why Ethereum will emerge victorious in the ongoing bull rally as Tether mints $2 billion USDT

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