USDT Issuance Increased by Tether Might Have Helped Bitcoin Repel Major Pullback
The cryptosphere was a bit shaken a few months ago when news of the Bitfinex and Tether cover up spread like wildfire. It was revealed sometime in April by the New York Attorney General’s office that the exchange firm had experienced an $850 million loss and used funds from Tether to discreetly cover it up. When this happened, the entire cryptocurrency market cap lost as much as $10 billion and the USDT, the world’s number one stablecoin, lost value and hit $0.94.
Despite the problem and the legal back and forth, Tether didn’t take long before it gained again and has continued to record a reasonably stable performance since then. After that happened, Tether or Bitfinex didn’t exactly occupy many news stories or headlines as all the scrutiny it got from the cryptosphere began to dwindle significantly. It also didn’t help that Bitcoin also continued its mouth-watering surge and with that, no one really paid much attention to Bitfinex or Tether.
The Bitcoin fluctuations have been topmost on the minds of most experts and analysts as it hit $13,000 and dropped again losing its value and market cap. At the time of writing, Bitcoin is trading at $10,514 with a $187 billion market cap and everyone is waiting for the number one to rise again. Because of all the movement, not a lot of people notice that there was some peculiar activity with Tether.
Reports have it that unknown to most of the market, there was an enormous surge in the issuance and release of USDT which saw the coin’s market cap swell significantly. Firstly, it was noticed that the Tether market cap which was $3.6 billion surprisingly jumped by as much as $100 million. In addition, a Giancarlo The Tether Whisperer (@Caspiancey) also took to Twitter to disclose something interesting. According to the tweet posted on Sunday the 30th:
“Yesterday there were 36 million ETH Tethers in the Treasury. Today 19 million.
At this rate, expect an ETH Tether print or a large-scale transfer of OMNI Tethers to ETH in the next 1-3 days.”
At the moment, Tether’s volume is about $29.34 billion but it was noted a few days ago when Bitcoin surged and almost hit $14,000 that the Tether volume surprisingly hit $40 billion. However, as fast as Bitcoin surged, it also plummeted and a parallel has now been drawn between the two coins because 55 million USDT were issued at almost the same time, which supposedly aided Bitcoin’s consolidation.
Many have now theorized that the significant surge in the USDT minting is a major factor that greatly prevented the market from plummeting more than it already did recently. It is also said that Bitcoin’s current price rally may also have something to do with certain traders who know about the Tether activity and can use it as appropriate.
Back in April, Tether was also accused of market manipulation when it was revealed that about $400 million worth of USDT was pumped into the market supposedly to prop up Bitcoin. John Griffin, a professor at the University of Texas, spoke in an interview last year on how Tether does this. He said:
“When Bitcoin prices drop soon after the issuance, Tethers at Bitfinex and other exchanges are used to buy Bitcoin in a coordinated way that drives the price.”