Tether CTO Paolo Ardoino called the minting of the new stablecoins part of its inventory replenishment.
USDT-stablecoin issuer Tether is making another move to extend its dominance in the $132 billion stablecoin market. Last night, Tether announced the minting of another $1 billion pegged token on the Ethereum blockchain network.
Tether CTO Paolo Ardoino called the minting of the new stablecoins part of its inventory replenishment. He further added that it was “an authorized but not issued transaction, which means that this amount will be used as inventory for the next period (of) issuance requests and chain redemptions.”
As we know, Tether USDT is the most dominant stablecoin on the market today. With a market capitalization of $81 billion, it is also the third largest digital asset currently in the crypto space. Although there have been allegations in the past about Tether issuing more stablecoins than it reserves cash, they have not been proven as of yet. Furthermore, Tether has also managed to quickly handle liquidity even during difficult market conditions, as well as the crypto winter of 2022.
Tether is also among the dominant stablecoin issuers on the Ethereum blockchain network. The total amount of USDT on the Ethereum blockchain network is more than 35 billion tokens. Its closest competitor is USDC coins issued by Circle, which have less than 30 billion tokens.
Does the issuance of USDT Stablecoins by Tether indicate any upcoming market trends?
Savvy investors often look at stablecoin supplies to predict future market trends and momentum. Some also argue that the supply of USDT is indicative of the direction of Bitcoin’s price movement, or the crypto market as a whole. Simon Cousaert, Research Director at The Block, explained:
“In general, Tether issues new USDT when they see and anticipate increased demand. This indicates that new cash is coming into the system, typically used to buy bitcoin, ether, and other cryptocurrencies.”
BDC Consulting also conducted correlation tests and concluded that the supply of USDT “shows a strong and statistically significant correlation” with the bitcoin price. “The resulting model with market entries and exits timed with USDT supply spikes produced an ROI (return on investment) of 229%, demonstrating that stablecoin supply data can be used in trading,” says. saying.
In another development, the TrueUSD stablecoin has become the most widely used stablecoin for trading Bitcoins on the Binance cryptocurrency exchange. Stablecoin TrueUSD’s dominance in Bitcoin trading grew after Binance removed zero-fee Bitcoin trading promotions on March 22, except for Bitcoin-TrueUSD. Currently, TrueUSD contributes a 50% share of Bitcoin trading volumes on Binance.
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Bhushan is a FinTech enthusiast and has a good knack for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain technology and cryptocurrencies. He is continuously in a learning process and stays motivated by sharing the knowledge he has acquired. In his spare time, he reads thrillers and sometimes explores his culinary skills.