Tether, the leading issuer of stablecoins in the crypto market, recently minted one billion USDT tokens on the Ethereum network, citing an “inventory replenish” for the next issuance requests and chain swaps. Tether’s dominance in the stablecoin market continues to grow as its USDT tokens on Ethereum alone amounts to over 35 billion tokens, with no other stablecoin even close.
Tether CTO Paolo Ardoino said that the one billion USDT token minting was an “authorized but not issued transaction” and will be used as inventory for the next period of issuance requests and chain swaps. This was done to replenish inventory.
The supply of USDT has historically been indicative of the direction in which the price of Bitcoin or the crypto market as a whole will trend. This suggests that new cash is coming into the system, which is generally used to buy Bitcoin, Ethereum and other cryptocurrencies. Decentrader founder and well-known crypto trader filbfilb tweeted in 2020, “I don’t subscribe to Tether conspiracies, but I do subscribe to supply and demand.”
A study from BDC Consulting last June concluded that the supply of USDT “does feature a strong and statistically significant correlation” with the bitcoin price, showing that stablecoin supply data can be used in trading.
Tether reported a net profit of $700 million for the fourth quarter of 2022, which it said was additional to its reserves. At the time, it claimed its consolidated total assets amounted to at least $67.04 billion, while its consolidated total liabilities amounted to $66.08 billion, reflecting excess reserves of at least $960 million.
The recent minting of one billion USDT tokens by Tether raises questions about its implications for the metaverse and the crypto sector. Some experts suggest that the increased supply of stablecoins could lead to a surge in demand for cryptocurrencies, ultimately driving up their prices. With over 81.5 billion dollar-pegged tokens, USDT’s supply is more than double that of USDC, which currently has just under 30 billion tokens. No other stablecoin comes close to these two in terms of supply. This data highlights Tether’s strong position in the stablecoin market and its continued dominance in the crypto sector.
However, others remain cautious about Tether’s dominance in the stablecoin market, with concerns about its reserves and potential impact on the overall stability of the crypto market.
As the crypto industry continues to grow, it remains to be seen how stablecoins like USDT will impact the market and its direction. Investors and traders alike will be watching closely to see how this latest development plays out and what it could mean for the future of cryptocurrency trading.