Stablecoin issuer Theter just minted another billion USDT on the Ethereum network on April 20. According to the company’s technical director, Paolo Ardoino, it was an inventory replenishment. This strike solidifies Tether’s dominance in the stablecoin market. But does it have a correlation with the trend of crypto, especially bitcoin (BTC)?
Tether strengthens its dominance in the market
Paolo Ardoino, CTO of Tether Limited, confirmed that the token minting represents the replenishment of inventory on Ethereum (ETH). He explains that it is an authorized but not issued transaction. This means that the amount will be used as inventory for the next period of broadcast requests and channel exchanges. Currently, Tether is the primary issuer of stablecoins on the Ethereum blockchain. He then minted another billion USDT on the network.
USDT is the most popular stablecoin in the crypto industry and is pegged 1:1 to the US dollar. Additionally, Tether’s dominance in the stablecoin market is growing. Indeed, it now holds 44.67% of the market share of stablecoins. The total amount of USDT on Ethereum is over 35 billion tokens compared to 30 billion for USDC. In addition, USDT comprises 81.5 billion tokens pegged to dollars compared to less than 30 billion for USDC.
Does USDT Supply Reveal Bitcoin Trends?
Some consider that the supply of USDT has historically indicated the future trend of the cryptocurrency and Bitcoin market. According to The Block’s research director, Tether typically issues new USDT when it sees and anticipates a spike in demand. He adds that this indicates the entry of new liquidity into the system. These are usually used to buy bitcoin (BTC), Ether (ETH) or other cryptos.
And according to a study conducted by BDC Consulting, the supply of USDT has a strong and statistically significant correlation with the price of bitcoin (BTC). The study demonstrated that using USDT supply data yields a 229% return on investment. This implies that stablecoin supply data can be used in crypto trading.
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