Tether Expands Dominance in the Stablecoin Market
In a recent announcement, Tether, the issuer of the USDT stablecoin, has minted one billion additional USD-pegged tokens on the Ethereum blockchain network. This move comes as the company seeks to reinforce its hold on the $132 billion stablecoin market.
Paolo Ardoino, CTO of Tether, described the minting as a strategy to replenish inventory. He stated that the newly minted stablecoins are part of an “authorized but not issued transaction,” which will be utilized to meet future issuance requests and facilitate chain swaps.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.
— Paolo Ardoino 🍐 (@paoloardoino) April 20, 2023
USDT’s Strong Position in the Crypto Space
Tether’s USDT is currently the market’s most dominant stablecoin, boasting a market capitalization of $81 billion and ranking as the third-largest digital asset in the cryptocurrency ecosystem. Despite past allegations questioning Tether’s cash reserves, the company has effectively managed liquidity during challenging market conditions, including the crypto winter of 2022.
Furthermore, Tether stands as a leading stablecoin issuer on the Ethereum blockchain network, with over 35 billion USDT tokens in circulation. Its closest competitor, Circle’s USDC, trails behind with under 30 billion tokens.
What Does USDT Issuance Signal for Market Trends?
Astute investors often scrutinize stablecoin supplies to forecast market trends and momentum. Some even propose that the USDT supply can hint at the direction of Bitcoin prices or the broader crypto market. Simon Cousaert, a research director at The Block, elaborated:
Generally, Tether issues new USDT when they see and anticipate higher demand for it. This indicates new cash is coming into the system — generally used to buy bitcoin, ether and other cryptocurrencies.
BDC Consulting conducted correlation tests and found a strong, statistically significant relationship between USDT supply and Bitcoin prices. The study concluded that stablecoin supply data could be utilized in trading, yielding a return on investment of 229% when paired with market entry and exit timing.
TrueUSD Emerges as Top Stablecoin for Bitcoin Trading on Binance
In a separate development, TrueUSD has become the most popular stablecoin for trading Bitcoin on the Binance cryptocurrency exchange. Following Binance’s discontinuation of zero-fee Bitcoin trading promotions on March 22, except for Bitcoin-TrueUSD pairs, TrueUSD now accounts for 50% of Bitcoin trading volumes on the platform.
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Key Points
What is Tether’s latest move in the stablecoin market?
Tether recently announced the minting of one billion additional USD-pegged tokens on the Ethereum blockchain network to extend its dominance in the $132 billion stablecoin market.
How does USDT issuance impact market trends?
Many investors analyze USDT supply to predict market trends, as an increase in supply often signals higher demand for cryptocurrencies like Bitcoin and Ethereum.
What is TrueUSD’s role in the Binance exchange?
TrueUSD has become the most popular stablecoin for trading Bitcoin on Binance, accounting for 50% of Bitcoin trading volumes following the discontinuation of zero-fee Bitcoin trading promotions for all pairs except Bitcoin-TrueUSD.
How does Tether’s USDT compare to its competitors?
Tether’s USDT is the most dominant stablecoin in the market, with a market capitalization of $81 billion. Its closest competitor, Circle’s USDC, has less than 30 billion tokens in circulation.
What does Tether’s CTO say about the new USDT minting?
Paolo Ardoino, CTO of Tether, has described the minting as a replenishment of inventory to meet future issuance requests and facilitate chain swaps.
