April 21, 2020 – Whale Alert is a Twitter account that regularly tweets whenever there is a large crypto transaction that is happening. This is possible because all transactions can be publicly found on the blockchain. This weekend, it tweeted that Tether (the company) printed $120 million new USDT.
Because of the constraints in crypto to fiat transactions, many have resorted to using stablecoins, which are pegged to the value of legal tender. For example. USDT’s value is tied to the USD. This means 1 USDT is 1 USD 99.999% of the time. If a person profited in a Bitcoin trade, they will park the money in USDT within exchanges instead of moving it out to fiat (USD), which will always mean more transaction fees.
So when a large quantity of USDT is printed, the crypto world takes notice, just like this weekend. However, Tether CTO Paolo Ardoino said on Twitter that they minted USDT 120 million to meet future demand.
PSA: 120M USDt inventory replenish.
Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests.
— Paolo Ardoino (@paoloardoino) April 18, 2020
Anticipating a spike? According to a recent analysis, the printing of USDT almost always coincided with a price increase in Bitcoin. Intelligence Firm TokenAnalyst found out the following:
- On days where USDT ERC20 is minted, the price of Bitcoin moves up 70% of the time.
- On days where USDT Omni is minted, the price of Bitcoin moves up 50% of the time.
This article is published on BitPinas: Tether Mints $120 Million USDT