In a now-deleted tweet, Coinbase Custody International announced it was adding support for withdrawals and deposits in the stablecoin tether.
While that May 30 tweet is now gone, it’s hard to hide its effects given a recent surge in the stablecoin’s count of active addresses. The number of unique addresses active in the network, either as a sender or receiver, nearly doubled to 203,776 last week, having risen by 26% in May, according to data provided by the blockchain analytics firm Glassnode. However, as of Tuesday, the number of active addresses was back down sharply to 122,809.
Coinbase Custody’s original tweet was shared on the cryptocurrency exchange Bitfinex’s social platform and also acknowledged by Paolo Ardoino, chief technology officer at Bitfinex and Tether Ltd (creator of tether).
It is unclear when the tweet was removed. Also, there is no mention of USDT in the list of supported assets on its official website. CoinDesk reached out to Coinbase Custody on Tuesday for information on whether it are supporting tether. As of press time, we have yet to receive any reply.
While that mystery remains, the on-chain data shows the original announcement was followed by a spike in the number of active addresses.
“Coinbase Custody International’s announcement may have contributed to the recent jump in addresses,” said Wilson Withiam, research analyst at data provider Messari.
The custodian mainly serves wealthy institutional investors, such as family offices and trading firms. As such, one may conclude that its decision to add support for tether is reflective of the increased institutional interest in the stablecoin.
Demand for tether and other dollar-backed stablecoins has been on the rise this year in the wake of the U.S. dollar shortage in the global economy and extremely low interest rates in fiat markets as a result of the coronavirus pandemic. While commercial banks across the advanced world are offering near zero interest rates on deposits, cryptocurrency lending platforms including Nexo and Celsius Network are paying 8% interest rate on tether deposits.
Hence, it’s no surprise the number of active addresses has risen by over 600% so far this year. Meanwhile, Tether Ltd., the company behind the stablecoin, has issued over $5 billion worth of tether since January and its market capitalization has increased from $4 billion to $9.3 billion, according to Glassnode.