The crypto world is notoriously volatile, where a simple Tweet can trigger a wave of panic. This is why Tether’s CTO provided clarification regarding the creation of 1 billion USDT stablecoins on the TRON blockchain. What if the minting of these new stablecoins had an impact on Bitcoin?
A question of restocking
On September 19, Whale Alert posted a tweet indicating the minting of 1,000,719,999 USDT on the TRON network. Such a tweet could have created disruption in the crypto market, but fortunately, someone intervened.
A minute later, Paolo Ardoino, Tether’s technical director, responded to this publication. He provided clarification regarding the creation of these USDT cryptos. Indeed, it would only be a matter of replenishing the Tether Treasury, in order to support chain exchanges.
But what impact on the total circulating supply of USDT crypto? On the Tron network, an increase of 1 billion tokens after the issuance of these cryptos. But on all channels, none. Indeed, after the creation of the new tokens on the destination blockchain, the issuer then burns the same quantity on the initial blockchain. This is in order to maintain the 1:1 ratio between the total supply of USDT in circulation on all chains and its dollar reserves.
A potential impact on the crypto Bitcoin?
For some traders and investors, the movements of stablecoins like Tether should be monitored because it can indirectly affect the crypto market.
Minting a large amount of USDT on the TRON network could suggest that a large purchase is brewing on this blockchain. If Bitcoin were available on this network, this could put upward pressure on its price.
However, it should be noted that such an operation is not new from Tether. On June 12, approximately the same number of tokens were minted on Ethereum.
But what is the link with Bitcoin? Well, it is interesting to note that as the chart above shows, the price of Bitcoin increased by 27% three days after the creation of these tokens. However, it is worth noting that at the time there was also news regarding Bitcoin ETFs.
Who knows, in three days, Bitcoin (BTC) could also resume the same scenario after the minting of these 1 billion USDT. Take with a grain of salt…
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