Tether (USDT) brings $150 billion stablecoin market to Dubai: BTC and ETH prices may react

This growth is driven by favorable regulatory frameworks, the approval of Bitcoin ETFs, and bullish sentiment in the cryptocurrency market. The United Arab Emirates leads the region with 72% of crypto users actively investing in Bitcoin.

Centralized crypto exchanges worldwide have reported a significant increase in users from the Middle East. According to Bitget Research, these exchanges recorded an average of over 500,000 daily active users in February 2024, an increase from the previous year. The UAE's crypto-friendly policies and the approval of spot Bitcoin ETFs have played a crucial role in this adoption.

The launch of Tether's dirham-pegged stablecoin could boost institutional interest in the Middle East's crypto markets. Institutions looking to capitalize on the region's growing crypto adoption could view the stablecoin as a gateway to participate in the UAE's burgeoning digital economy.

Historically, institutional engagement has been a catalyst for significant price movements in major cryptocurrencies, with Bitcoin price soaring to an all-time high of $72,000 in April 2024 following increased institutional investment via newly launched BTC spot ETFs in the US.

A similar trend could emerge if institutions adopt the new dirham-pegged stablecoin, potentially increasing demand for Bitcoin and Ethereum as hedging instruments.

In addition, the launch of a stablecoin pegged to the dirham could increase liquidity in the UAE crypto markets and make it easier for institutions to enter and close positions.

2. Historical trends indicate an optimistic outlook for global crypto markets

Tether's new dirham-pegged stablecoin could also have a significant impact on the adoption of Bitcoin and Ethereum in the UAE. Since the stablecoin enables frictionless transactions in AED, it could lead to an increase in the use of Bitcoin and Ethereum for cross-border payments and remittances.

The launch of a stablecoin that allows easy exchange between AED and BTC could increase Bitcoin's attractiveness as a safe-haven asset in the Middle East. This could lead to increased demand for Bitcoin and drive up its price.

Similarly, Ethereum, known for its smart contract features, could see greater adoption in the UAE as the dirham-pegged stablecoin is integrated into decentralized finance (DeFi) platforms.

Historical trends in the cryptocurrency market suggest that the launch of a new stablecoin often leads to increased trading activity and higher prices for major cryptocurrencies.

For example, after the introduction of USDT in 2014, there was a significant increase in the trading volume and price of Bitcoin.