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USDT Usage on Ethereum Shifts Away From Asia Daytime Hours

The changing trading patterns in USDT might be the result of China's recent crackdown on cryptocurrency mining and trading.

Aug 3, 2021 at 6:48 p.m. UTC
Updated Sep 14, 2021 at 1:34 p.m. UTC

The Tether stablecoin USDT’s daily usage on the Ethereum blockchain has shifted slightly later in the day from Asian business hours toward European and U.S. market hours, possibly because of China's crackdown on cryptocurrency trading and USDT users' migration to other blockchains, a new report suggests. 

Last year, most USDT activity on Ethereum happened between 2:00 and 14:00 coordinated universal time, and during that time, the period from 6:00 to 8:00 UTC was the busiest, according to the report by blockchain-analysis firm Coin Metrics. This year, however, there has been less usage from 2:00 to 6:00 UTC and more from 15:00 to 20:00 UTC.

Investors can trade crypto 24 hours, seven days a week, but local stock exchange times can be used as a proxy for when traders in any given region are active.

Several factors could have contributed to the shift of USDT’s daily usage pattern on Ethereum, according to Coin Metrics, including that some trading activity has shifted to other blockchains that offer lower fees than Ethereum, such as Tron and Solana. 

Also, as China reiterated its crypto ban and started cracking down on crypto mining in May, the migration of crypto miners and investors may have led to a drop in Asia-based USDT activity. That migration, however, wouldn't explain the changes before May, Coin Metrics noted.

It's also possible that that USDT on Ethereum is increasingly being used as collateral in decentralized finance (DeFi) protocols. 

In comparison, the rival dollar-linked stablecoin USDC sees most usage from 14:00 to 22:00 UTC, in line with U.S. market hours. Bitcoin and ether activity are more equally distributed throughout the day.

Chart shows usage of the rival USDC stablecoin is mostly concentrated during U.S. market hours, although it's more evenly distributed when compared with USDT.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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