3 key Notes on the Recent 250m USDT “Printing” on Ethereum’s Blockchain
Every time the Bitcoin price shows signs of moving up, it is a matter of time until enthusiasts find some sort of link to potentially worrisome Tether behavior. These correlations will always be present, as not everything that happens is an illegal course of action. The recent “printing spree” Tether has been on shows 250 million Ethereum-based USDT has been brought into circulation. The bigger question is whether or not one should be concerned about it.
The 2 big USDT Transactions
It has to be said, a Bitcoin price increase usually results in more USDT being brought into circulation. That is a big problem, according to a growing portion of the cryptocurrency industry. After all, many people still believe Tether is effectively manipulating the cryptocurrency market, which is also part of the reason why there appears to be an investigation taking place against this company.
Even so, the business has to be resumed as usual. This is why two separate USDT transactions have gotten a lot of attention, even though they appear to be perfectly legitimate. One 150m USDT and one 1000m USDT transaction were created in the past eight days. This seems to coincide with the recent Bitcoin price increase. However, no one knows for sure if USDT demand rises because Bitcoin moves up, or if Bitcoin moves up due to an increase in USDT supply. For now, these transactions appear perfectly legitimate until proven otherwise.
Transaction Amounts are Normal
One also has to keep in mind it is not uncommon for Tether to issue large batches of USDT in one go. Every asset created needs to be backed by USD holdings by the parent company. While it may seem odd to see them increase the supply by nearly 10% in just a week’s time, one also has to keep in mind this is not abnormal. The company issues its asset on a regular basis and will continue to do so for the foreseeable future.
However, it is true that two of these very large transactions don’t often go back-to back. In the past, several $20m transactions have been documented, but that is not exactly the bigger problem. If the company is adding more assets in quick succession, it seems to indicate the company is growing and demand for its USDT asset is still increasing in 2019. It is the most successful stablecoin in the industry to date, despite some of the perceived controversy surrounding it.
Funds are not in Circulation yet
When the community started offering backlash to this recent “printing spree”, Bitfinex CTO Paolo Ardoino was quick to point out one crucial aspect. A big portion of these freshly minted assets is not in circulation at this time. While the assets are authorized for use, they are not in use right now. It would appear Tether decided to up the balance of its treasury wallet to comply with future issuance requests.
Whether or not that is a smart and/or legal decision, is a different matter altogether. As the coins are not in circulation, it doesn’t seem to matter if the parent company has the necessary pegged funds in its bank accounts at this time. That in itself will undoubtedly spark a lot more heated debates moving forward, but the company doesn’t seem too bothered by these doubts. After all, roughly $48m worth of USDT on the Ethereum blockchain is authorized but not issued. The same goes for the Tron and Omni chains accordingly.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.
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