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A key indicator of the demand for cryptocurrencies has emerged, revealing a shift in focus among some Chinese investors from digital assets to the domestic stock market, which is experiencing a notable rise. 
Despite the issuance of a ban on cryptocurrency trading in China in 2021, many citizens have continued to utilize foreign trading platforms to manage their digital assets and conduct buy and sell transactions. This trend appears to be an effort to circumvent restrictions on money transfers outside the country. 
Recently, the stablecoin Tether (USDT), the most traded cryptocurrency globally, has been trading at a discount against the U.S. dollar. This trend began in late September and was highlighted in a study by Dinislava Obert, a prominent analyst at Kaiko, a blockchain data firm. The emergence of this discount coincides with measures taken by the People’s Bank of China to stimulate the economy, which in turn has led to rising stock prices. 
Livio Wing, CEO of the trading platform Hash Key, explained that the rapid transition from cryptocurrencies to cash is a strong indicator of increasing demand for Chinese stocks. 
Since trading pairs for Tether against the Chinese yuan are unavailable due to the ban, the U.S. dollar has become the only benchmark for measuring this activity, according to Obert from Kaiko. The slight discount in Tether’s price suggests a heightened demand for dollars and selling pressure on Tether. 
While it is challenging to directly quantify the selling pressure on Tether from Chinese investors on trading platforms, other exchanges, such as Binance, provide a clearer picture. The trading prices of Tether against the Chinese yuan on these platforms differ from the official exchange rate, indicating significant demand for Tether among Chinese investors. 
Annabel Huang, managing partner at Amber Group, pointed out a correlation between this rising demand for Tether and an increased interest in local blue-chip stocks. She added that some brokerage firms continued to offer their services during China’s Golden Week holiday to accommodate this growing demand. 
The post <a href="https://www.unlock-bc.com/130519/tether-under-pressure-china-tries-stimulate-economy/">Tether Under Pressure as China Tries to Stimulate Economy</a> appeared first on <a href="https://www.unlock-bc.com">UNLOCK Blockchain</a>.

Tether Under Pressure as China Tries to Stimulate Economy

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