Tether mints $19B USDT in 30 days, raising market questions
Tether mints 19 billion USDT in a month, fueling crypto liquidity surge
Tether, the issuer of the world’s most popular stablecoin, USDT, has minted 19 billion tokens since November 6, injecting substantial liquidity into the cryptocurrency market.
In its most recent move, Tether created 2 billion USDT on December 6, following two separate minting transactions of 1 billion USDT each earlier in the week, reports BeInCrypto.
This rapid expansion of the USDT supply highlights Tether’s role as a major liquidity provider in the crypto ecosystem but also raises concerns about the risks of oversupply and transparency in stablecoin backing.
Boosting Liquidity Amid Bitcoin Surge
Tether’s activity comes at a time of heightened market activity, as Bitcoin’s price soared past $99,000, driven by strong institutional interest and macroeconomic factors. The fresh liquidity provided by USDT minting is designed to facilitate smoother trading, potentially narrowing price spreads during high volumes.
However, with 19 billion USDT minted in just over a month, questions loom about whether this level of supply expansion is sustainable. Tether’s ability to meet market demand demonstrates its utility but underscores the need for confidence in the reserves backing its stablecoin.
Blockchain analysts speculate that the newly minted USDT could stabilize markets, though the scale and timing of the minting have sparked debates among critics and supporters alike.
Transparency and Systemic Risk Concerns
While Tether has positioned itself as an essential player in the crypto market, its aggressive supply expansion renews calls for greater transparency regarding its reserve holdings. Critics argue that unchecked minting without robust disclosure could destabilize the market, especially if liquidity is not deployed effectively.
As Bitcoin continues its upward trajectory, breaking records and nearing $100,000, the role of stablecoins like USDT in ensuring market liquidity and stability will remain under scrutiny. Industry stakeholders and regulators will likely demand more rigorous oversight to ensure the integrity of this vital financial instrument.
Recently we wrote, that over 400 million cryptocurrency wallets now hold a positive balance.
