USD-linked stablecoin has printed another quarter-billion USD, representing a significant injection of capital into the ailing cryptocurrency market. The issuance of the new USDT, historically linked with a surge in positive market action.
Tether has recently addressed community concern regarding financial backing, with the release of an FSS report stating that Tether does indeed hold sufficient capital to back all printed USDT. The FSS report, released last week, followed an investigation published by University of Texas researchers revealing evidence that USDT could have been used in Bitcoin price manipulation.
The latest run of USDT printing, however, appears to have had a positive impact on the market — Litecoin Foundation Managing Director Charlie Lee highlights the fact that the issuance of new Tether represents fresh capital entering the market, and thus could signal a potential price rise:
Generally, this has been a precursor of price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn't mean they will buy right away. DYOR https://t.co/zg2PEjGohv
— Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018
2018 Tether Issuance Linked With Price Pumps
The entrance of new USDT into the cryptocurrency market is typically associated with positive market movement — the last issuance of 250,000,000 Tether on the May 19 saw Bitcoin prices capture over $300 in less than one day. The earlier printing of $300,000,000 Tether on March 21 saw Bitcoin rise from $8,500 USD to beyond the $9,000 level.
Daily Tether trading volume now exceeds $4 billion USD, hinting toward the high levels of volatility present within the current market. The move to print additional Tether follows the resignation of Phil Potter, the Chief Strategy Officer of Bitfinex and Tether, who stated that he would be seeking new opportunities:
“As Bitfinex pivots away from the U.S., I felt that, as a U.S. person, it was time for me to rethink my position as a member of the executive team”
Bitcoin, currently ranked #1 by market cap, is up 0.87% over the past 24 hours. BTC has a market cap of $105.26B with a 24 hour volume of $3.23B.
Chart by CryptoCompare
Cover Photo by Filip Mroz on Unsplash