Tether mints one billion new USDT tokens of the ERC-20 standard on Ethereum. Experts believe that the company’s actions may indicate an increase in demand for cryptocurrencies in general.
Tether, a USDT stablecoin issuer, minted one billion new USDT tokens of ERC-20 on the Ethereum network. This is evidenced by data from Etherscan.
According to Tether CTO Paolo Ardoino, the tokens weren’t minted for release to the market. He said the tokens would be used as inventory for future issuance requests and chain swaps.
Some members of the cryptocurrency community think that the volume of USDT supply can give an idea of how prices of BTC and other cryptocurrencies will change in the market. Simon Cousaert, Research Director at The Block, says that the issuance of new USDT is usually associated with the expectation of increased demand for them, which can lead to an influx of capital into the cryptocurrency market. Founder of Decentrader and Crypto Trader filbfilb, who stresses the importance of supply and demand in the market, agrees with his view.
Such assumptions are supported by a study by BDC Consulting conducted last June, which revealed a strong correlation between USDT supply and the price of BTC. Thus, a model based on data on the supply of stablecoins showed a return on investment of 229%.
By the way, in February, Tether reported that the company recorded a net profit of $700 million in Q4 2022, which was added to its reserves. The company’s total assets are ~$67.04 billion, while its total liabilities don’t exceed ~$66.08 billion.
According to 1Q 2023 results published by CoinGecko, Tether (USDT) strengthened its market position, having increased its market cap by 20.5%.
