Crypto junkies like myself check the top 100 at coinmarketcap.com multiple times a day. During the last Bitcoin/Crypto correction I noticed an interesting phenomenon when around 25%-30% of the entire market cap disappeared over the course of two days. 99 out of the top 100 cryptocurrencies turned blood red while the mainstream media was screaming tulip mania, "the Bitcoin bubble has burst.” I had no doubt it would be short-lived but it sure was ugly at the time. You can expect more of this brand of fear mongering in the near future.
During this two-day sell off only one crypto stood strong, ironically it was the one pegged to the U.S. Dollar, Tether (USDT). On May 25th Bitcoin peaked at around $2800 USD after frenzied buying mostly due to activity in the Asian markets. Two days later on May 27th BTC bottomed at around $1900. During the same time period Tether rose from about $1.00 to $1.20. If you timed this trade perfectly you would have secured your BTC profits at it’s peak and made an additional 20% in USDT before buying back into BTC at $1900.
$2800 (per BTC) + $560 (20%) = $3360 USDT (Tether)
$3360 USDT @ $1900 BTC = 1.768 BTC
Perfect timing would have turned 1 Bitcoin into 1.768 Bitcoin in two days.
One of the foundational drivers for the rush to cryptos is a lack of faith in fiat currency. Conversely when crypto holders get weak knees they rush back to old faithful, the U.S. Dollar. As you and I know it’s costly and challenging to convert BTC to fiat quickly thus the Tether trade becomes the go-to safe haven crypto vehicle.
Time will tell if this trend holds true during the next correction. When you see Bitcoin begin to go parabolic like it did in late May you may want to consider seeking safety in the loving arms of the tokenized U.S. Dollar, Tether. I know it sounds like crazy talk but for the time being the Dollar is stable and Tether rarely goes below $1.00. If nothing else this could be a way to secure profits during future Bitcoin corrections.
The crypto space is the Wild West right now; there is gold to be found and peril around every corner. Trade at your own risk.
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