Tether Treasury Balance Soars Past $1 Billion

Tether Treasury’s $1B USDT boost hints at market rally as CME data suggests Fed rate drop. Crypto traders ready stablecoins for asset purchases.

On August 13, Tether’s USDT$1.00 holdings on cryptocurrency exchanges reached a record high of 20.339 billion. This indicates that investors are preparing to use these stablecoins in cryptocurrency assets ahead of the US Federal Reserve’s rate decision in September.

Tether Treasury issues $1 billion in USDT.

Tether’s record balance on cryptocurrency exchanges resulted from its namesake Treasury minting $1 billion worth of stablecoin. The data tracking website Whale Alert said on August 13 that Tether had contributed an additional $1 billion to the Ethereum network.

The latest $1 billion USDT transaction was described as an “inventory replenishment,” with Tether CEO Paolo Ardoino stressing that it was “authorized but not issued.” The tokens are set aside for chain swaps and future issuance requests.

Ordering enough goods to meet demand without going overboard is known as inventory replenishment in conventional finance. Similarly, Tether produces USDT to keep ample reserves and retains them in its Treasury until required, guaranteeing efficient liquidity management without putting them into use right away.

As of August 14, $941.72 million in USDT were “authorized but not issued” on Ethereum, per the Tether Transparency page statistics. Put another way, the fact that almost 60 million USDT from the most recent $1 billion mint has already been distributed shows how popular the product is.

Do investors in USDT still need to be made active?

Tether’s exchange balance has historically increased in both bull and bear markets.

The increase in USDT reserves during bear markets frequently indicates that traders switch from risky cryptocurrencies to stablecoins to protect themselves from market volatility. On the other hand, the accumulation of USDT in bull markets can mean that traders are hoarding stablecoins to use for cryptocurrency purchases at a later date when values decline.

Recent indicators point to the possibility of a bullish case.

For example, on August 13, the cryptocurrency trading company Cumberland received $141.50 million USDT from Tether Treasury. According to Lookonchain, the latter routed the funds among several cryptocurrency exchanges, such as Binance, Coinbase, and Kraken.

Cumberland may be preparing for any market turmoil ahead of the Fed’s September rate decision, as he has sent $1.08 billion in USDT to cryptocurrency exchanges in less than a week.

The CME data suggests that the Fed will decrease rates, which might encourage market optimism.

Marcus Thielen, lead researcher at 10x Research, contends in his most recent analysis that “nearly $2.8 billion was issued by Tether and Circle earlier last week, indicating that some institutional investors are injecting fresh capital into the crypto market.”

“If this trend of issuance (not just minting) continues, Bitcoin could see further gains.”