Tether, the leading stablecoin issuer, has recently minted one billion USDT tokens on the Ethereum network. Many believe that the increased USDT supply is a sign of an anticipated demand for crypto exposure.
Late last night, Tether released the new batch of USDT tokens. Tether CTO Paolo Ardoino clarified that this action was an “inventory replenish,” adding that the newly minted tokens would be used for future issuance requests and chain swaps. USDT is the most popular stablecoin in the crypto industry, pegged 1:1 to the United States dollar, making it a key player in trading on large exchanges that don’t accept fiat currencies.
Tether’s position as the dominant stablecoin issuer on the Ethereum blockchain is further solidified with this minting. With over 35 billion tokens in circulation, USDT has outpaced competitors like Circle-issued USDC, which accounts for less than 30 billion tokens, and Binance USD, which holds less than seven billion tokens. Across multiple blockchains, Tether’s dominance remains unchallenged, boasting over 81.5 billion dollar-pegged tokens in circulation.
Some experts argue that USDT supply trends can be indicative of the direction the crypto market is heading. Tether typically issues new USDT tokens in anticipation of higher demand, suggesting fresh cash influx into the crypto market. A BDC Consulting study last June supported these claims, showing a “strong and statistically significant correlation” between the supply of USDT and the bitcoin price. This finding implies that stablecoin supply data can be used in trading strategies, resulting in potentially high returns on investment.
Tether reported a net profit of $700 million for Q4 2022, adding to its reserves. With consolidated total assets amounting to at least $67.04 billion and consolidated total liabilities of $66.08 billion, Tether holds excess reserves of at least $960 million. With this latest minting, the stablecoin giant further strengthens its position in the crypto market, possibly indicating an upcoming surge in demand for cryptocurrencies.