On Tuesday, March 24, 2020, an additional $180 million worth of Tether (USDT) was printed, a development that analysts say is a net positive for Bitcoin and crypto.
Tether could be experiencing a surge of demand, or it is desperately trying to prop up the price of Bitcoin, judging from its recent activity.
For the past week, the stable coin’s Treasury has been more active than ever before, with Tether CTO Paolo Ardoino announcing that three tranches of USDT tokens worth $60 million each have been created over the last 2 days.
More specifically, he refers to these moves as “authorized but not issued transactions,” asserting that they will be used for inventory to meet future demand.
In yet another “inventory replenish,” Tether Treasury has minted another 180 million USDT in two separate transactions.
3 days ago, BTC price temporarily surged when about $40M in USDT was moved onto the Bitfinex exchange. Therefore, the fact that a lot more USDT could soon enter the crypto market may also be linked to the cryptocurrency market’s current upsurge over the past 24 hours.
Is The USDT Printing Spree Suspicious?
Ever since the drastic BTC price crash on March 12, stablecoins across the crypto markets have been really active in minting new currency.
Particularly, Tether has issued 240 million USDT in recent weeks, and the number has only grown with the latest major injection of $180 USDT.
Reactions to the fresh USDT have been mixed, with some analysts interpreting it as a clear signal that Bitcoin will soon soar higher, while others see it as a bad omen for what’s to come.
But Su Zhu, the CEO of Three Arrows Capital, explains that the surge in USDT mint is because of the ongoing emerging markets currency hyper-devaluation. In the case of a fall, USDT is their first exit.
BTC Could Benefit from Fresh Mints
Stable coin plays a critical role in crypto market liquidity. It is a preferred conduit for traders to either enter the scene or exit during periods of market turbulence.
USDT can be issued not only from Ethereum, as an ERC 20 token, or from Tron, making it the preferred coin for many crypto traders because of its liquidity and support by top exchanges.
As more USDT is minted from the Tether Treasury, many traders now see all this fresh capital injection as flowing into BTC reserves.
And looking at the past, there is often a positive correlation between BTC performance and the scheduling of new USDT mints, with new coin injections, resulting in rising BTC prices after a few days.