Tether, a stablecoin issuer, made headlines after issuing a massive $5 billion in stablecoins within 72 hours, injecting a large amount of USDT into the crypto market. This move has raised questions among crypto enthusiasts and in financial circles, especially concerning Tether’s key role in market liquidity.
Blockchain analytics firm SpotOnChain shared a timeline for Tether’s latest issuance, noting that $1 billion was issued on November 6, coinciding with Bitcoin reaching a new high of $76,200, and two more USDT issuances of $2 billion each took place on November 9 and 10 when Bitcoin crossed the $80,000 mark.
These issuances increased Tether’s market capitalization from $124 billion to $132 billion. Tether’s 24-hour trading volume has increased almost to $289 billion. Increased USDT traffic often leads to bullish moves in major cryptocurrencies. As Bitcoin approached the $100,000 milestone, market participants clearly linked Tether’s activity to the broader price rally.
Stablecoin volume is often used as an indicator of market sentiment, with high volumes of newly issued stablecoins being bullish in the crypto market and low volumes indicating bearish trends. Tether’s USDT is used to buy cryptocurrencies and is also a common tool for cash payments, making it crucial for trading activity.
Tether CEO Paolo Ardoino hinted at the company’s ambitious plans in 2025 with the statement, “In 2025, Tether must reach hyper-productivity to realize our grand vision.” Meanwhile, Howard Lutnick, CEO of Cantor Fitzgerald, expressed his opinion on the developments, defending Tether’s financial stability, but his claims have been met with skepticism due to the lack of transparent evidence of Tether’s reserves.
Cantor Fitzgerald has become a key banking partner for Tether, a notable change as many global banks distance themselves from the stablecoin issuer. As Tether’s influence grows, so does regulatory scrutiny. While the token issuance boosted market sentiment, voices around transparency and reserve concerns have also resurfaced.
Justin Bons, founder of Cyber Capital, criticized Tether and compared it to other big scandals in the crypto sector. “Tether’s insistence on avoiding detailed transparency creates unnecessary mistrust,” he argued. Opinions are thus divided about Tether’s practices. Some industry leaders see Tether’s periodic reports from auditors such as BDO Italia as sufficient evidence of reserves.
“Tether has proven the source of its reserves and has conducted credible third-party audits,” stated Ivo Georgiev, an employee of Ambire. Tether’s dominance in the stablecoin ecosystem shows that it plays a critical role in crypto-liquidity, with USDT accounting for over 75% of the stablecoin market.
However, as regulatory scrutiny increases, the company is under increasing pressure to increase transparency and address governance concerns.
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<p>The post Tether’s Massive Stablecoin Issuance: A Tale of Excitement and Concern first appeared on CoinBuzzFeed.</p>
