News Roundup — Tether’s USDT stablecoin faces uncertainty as MiCA regulations take effect on December 30, 2024

Major news stories this week;

1. Tether’s USDT stablecoin faces uncertainty as MiCA regulations take effect on December 30, 2024
2. In December 2024, Tether’s USDT lost $2 billion in market cap, but analysts view it as a buying opportunity
3. Bitcoin (BTC) has shown signs of strength despite a 2.5% drop in the past week
4. Crypto OTC trading volumes have surged recently
5. Bitcoin has had an outstanding performance in 2024

Story Summaries;

1. Tether’s USDT stablecoin faces uncertainty as MiCA regulations take effect on December 30, 2024, but Tether remains confident. While Coinbase has delisted USDT for EU customers, Binance and Crypto.com continue listing it, awaiting clearer guidance. No EU body has deemed USDT non-compliant, and Tether’s CEO, Paolo Ardoino, dismisses rumors of an immediate delisting.
   Tether is investing in European companies to strengthen its position and is working toward regulatory compliance globally. Despite MiCA’s requirements, Tether’s market dominance and liquidity make it unlikely to be displaced, with many analysts believing it will retain its strong position in Europe.
2. In December 2024, Tether’s USDT lost $2 billion in market cap amid concerns over the EU’s MiCA regulation, which takes full effect on December 30, 2024. USDT’s market cap dropped from $140.5 billion to $138 billion, and its price fell to $0.997, a two-year low.
   Despite fears, holding USDT is not illegal under MiCA, and its primary trading volume (80%) comes from Asia. Tether continues to dominate the market, with high trading volumes.  Analysts view the current FUD as a buying opportunity, noting Tether's $140 billion market cap and its role as the leading stablecoin. Blockchain executive Samson Mow also emphasized Tether’s strong position, backed by Cantor Fitzgerald and holding US treasuries.
3. Bitcoin has shown signs of strength despite a 2.5% drop in the past week, with the ADX at 18.81, signaling a weakening downtrend and potential consolidation. This suggests that the downward pressure is easing, and Bitcoin may enter a phase of reduced volatility and sideways price action.
   Whale accumulation is also a positive indicator. The number of Bitcoin addresses holding at least 1,000 BTC stabilized at 2,056 after recent declines, suggesting a cautious but growing confidence among major holders.
   Bitcoin’s price is currently testing critical levels: resistance at $94,200 and support at $90,700. If resistance breaks, BTC could see upward movement toward $98,700 and $102,500.
4. Crypto OTC trading volumes have surged recently, driven by the U.S. election and rising prices in Bitcoin and Ethereum. Firms like Kraken and Wintermute report a 220% increase in volumes, with institutions expanding beyond Bitcoin and Ethereum to altcoins like Solana. The election and ETF approvals have boosted demand, and OTC desks expect strong growth into 2025. Traders are also increasingly using options to hedge risks, signaling greater institutional adoption and a maturing derivatives market.
5. Bitcoin has had an outstanding performance in 2024, leading in both absolute and risk-adjusted returns compared to other major assets. Despite a December dip triggered by FOMC outflows and holiday de-risking, Bitcoin remains a top performer, with risk-adjusted returns comparable to gold but higher total gains due to its volatility.
   While short-term ETF flows have weakened, Bitcoin is expected to maintain its risk-adjusted advantage as institutional interest persists. Despite some uncertainty, Bitcoin’s bullish trend is likely to continue, with ETF flows being a crucial indicator in the new year.

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And that’s all for last week’s news! Wishing you a great week ahead!

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