While Bitcoin is pumping, the Tether Treasury is printing more and more USDT. Today, it printed yet another fresh batch of 60 million USDT.
Crypto community has taken to liken Tether Treasury minting new USDT to the Federal Reserve's infamous “money printer go BRRR.”
This relentless printing has its total amount of assets reaching past $7.7 billion, as per its transparency report. Yesterday, Tether surpassed $1 billion worth of USDT issued on Tron blockchain, also exceeding the $5.2 million on EOS and coming close to Omni’s $1.3 billion.
In less than two months, Tether has issued more than $3.5 billion worth of USDT.
Also, in less than a month, the number of addresses with a balance in Tether saw a 28% increase to a total of 1.32 million addresses with an actual balance in USDT, as per IntoTheBlock.
In the ongoing adoption of stablecoins, most of the growth is coming from Tether. This growth in Tether could be because of the growing demand for USD-backed stablecoins just like USD is seeing heightened demand globally during the market turmoil.
“We are gratified by the recent market demand for USDT,” said Stuart Hoegner, General Counsel at Bitfinex adding,
“Possible reasons for the new inflow of fiat and demand for stablecoin issuance might include users wishing to buy other digital assets and using stablecoins as a low-friction on-ramp (as we believe they always have).”
With the volume reaching $3.9 billion on top ten exchanges with real volume, there is a lot of activity in the market. It is possible some of this dry power has already made its way to Bitcoin or will do eventually.
“There's been a really large amount of inflows into USDT recently! Seeing tons of buyers (with real money); can definitely confirm first hand that USD is flowing into the USDT account for purchases,” said Sam Bankman-Fried, CEO of derivatives exchange FTX.
USDT a safer bet?
As we reported, a paper concluded that Tether, notorious for being used to pump BTC prices, isn’t affecting the prices of cryptocurrencies.
The paper rather argued that Tether is solving the store-of-value problem by pegging the value of the coin to the US dollar and as such performing as a “safe haven” in the digital economy.
Also, during the period of collapse in the BTC market such as in Jan-Feb 2018 and recently during the COVID-19 pandemic, there has been “a significant rebalancing of portfolios away from Bitcoin and towards Tether.”
"In periods of risk, some investors will choose to exchange into a better store of value"
– Yeah, try telling this to someone convinced that the only use case for USDT is pumping up the price of Bitcoin, LOL… https://t.co/sDCRqR6ZZR
— ᴹᵁᴴ𝔍𝔬𝔢⁰⁰⁷ 🐳 (@J0E007) April 21, 2020
Trader Tyler D. Coates supported this argument saying he would rather own USDT than USD if the economy collapses. His reasoning behind it is,
“I believe Tether has more USD backing than most banks. I also believe that they're more fiscally responsible because they are not qualified for, or relying on, a bailout from the Fed.”
“Furthermore it is possible that an economic collapse would be bullish for BTC and that would likely create demand for USDT,” he added.
Bitfinex Bitcoin whale Joe007 shares a similar opinion. “USD in a bank account is also at risk (e.g. bank becomes insolvent),” he said.
“When a financial crisis looms, USDT might actually be a safer bet.”
But not all are of the same opinion as veteran trader Peter Brandt compared Tether to “Nigerain trinket” and called people fools for holding wealth in Tether even overnight as it won’t let anyone escape the IRS any way and USDT is held on the exchange that doesn’t disclose their financial strength.
“It is a joke when ppl condemn USD as fiat, yet hold tether,” said Brandt.