TL;DR
- New Minting: Tether has minted an additional 1 billion USDT on the Tron Network, historically correlating with positive Bitcoin price movements.
- Market Impact: The minting could potentially drive Bitcoin’s price up, as Tether’s market cap exceeds $110 billion and it holds a significant amount of Bitcoin.
- Institutional Influence: Despite recent outflows, institutional investments in spot Bitcoin ETFs show sustained interest, which may affect Bitcoin’s price trajectory.
Tether, the issuer of the popular stablecoin USDT, has minted an additional 1 billion USDT through its treasury. This action, recorded on May 16 at 16:50 UTC, has sparked discussions within the crypto community about its potential impact on market dynamics, particularly for Bitcoin (BTC).
Tether Treasury minted 1B $USDT again 13 hours ago.#TetherTreasury has minted a total of 31B $USDT on #TRON and #Ethereum in the past year.
These minted $USDT drove the price of $BTC from $27K to $73K.https://t.co/2wFo2DEvz3 pic.twitter.com/IxEpBN36C0
— Lookonchain (@lookonchain) May 17, 2024
Tether’s CEO, Paolo Ardoino, clarified the transaction, stating that the minted USDT was added to the inventory on the Tron Network as an authorized yet unissued transaction. This minting comes after a previous issuance on April 16, amidst a market liquidity drain.
Over the past year, Tether Treasury has minted a staggering 31 billion USDT across the TRON and Ethereum blockchains, as reported by Lookonchain. The timing of Tether’s minting coincides with a correction in Bitcoin’s price to the $64,600 range.
Historical data from CryptoQuant has shown a strong correlation between increases in USDT supply and positive movements in Bitcoin’s price, suggesting that the minting could be super bullish for BTC.
The speculation is that the influx of new USDT could be utilized to bolster Bitcoin’s price, a theory supported by the fact that previous mintings have been associated with Bitcoin reaching highs above $70,000.
Bitcoin’s Price Correlation: Deciphering Tether’s USDT Influence
Despite these bullish signs, Bitcoin’s price has remained relatively stable, fluctuating between $64,000 and $66,000 in the past day. The price had previously varied between $60,000 and $62,000 until the release of US inflation data, which triggered a price jump to $66,000, hinting at a slowing inflation rate.
With Tether’s market capitalization now exceeding $110 billion, the latest minting could catalyze Bitcoin to reach new all-time highs.
Tether’s strategic initiative to broaden its asset base has been underscored by a notable allocation of 15% of its net earnings into Bitcoin, reinforcing the potential for market impact. By March 31, Tether’s acquisition of 8,888 Bitcoin, with a market value of $618 million, has elevated it to the status of the world’s seventh-largest holder of Bitcoin.
Bitcoin’s price trajectory continues to be influenced by institutional investments, particularly the inflows into spot Bitcoin ETFs in the United States. Despite a second week of net outflows, the cumulative net flows have reached over $200 million, indicating sustained institutional interest.
Tether’s latest minting of 1 billion USDT could be a bullish sign for Bitcoin, potentially driving the cryptocurrency’s price to unprecedented levels. As the market digests this development, all eyes will be on Bitcoin’s response to this influx of stablecoin supply.
