Stablecoin issuer Tether added 3 billion dollars in USDT over a 24-hour period on November 23, as Bitcoin was teasing the $100,000 psychological milestone.
According to data from Arkham Intelligence, at least $2 billion worth of USDT tokens were minted on the Ethereum network, with an additional $ billion worth of tokens minted on the Tron network in back-to-back transactions. A post on the Lookonchain X handle further revealed that Tether has minted at least $13 billion worth of USDT since November 8.
Stablecoins as a Proxy to Gauge Market Interest
News that Tether added 3 billion dollars in USDT seems to have been driven by an emerging need which is most likely related to the jubilation in the crypto market associated with Bitcoin’s rally towards the historic $100,000. Bitcoin managed to reach at least $300 shy of the $100K mark last Friday, trading up to $98,337, with its ATH price reaching $99,700 at some point during November 22 trading.
Responding to achieving a record 3 billion USDT in 24 hours, Tether CEO Paolo Ardoino described the growing market optimism as he heads to the end of 2024, saying, “In 2025, Tether will need to achieve hyper-productivity to realize our grand vision.” For most traders and investors, stablecoins are the best proxy to gauge people’s interest in the crypto market. Most traders consider a high volume of minted stablecoins, such as the 3 billion USDT in 24 hours, as a bullish signal, with low volumes sending a bearish sentiment.
US Elections Results Drove Demand for Stablecoins
Not immune to ongoing political developments such as the recent election of a pro-crypto president in the United States during the November 5 Elections, experts believe USDT added 3 billion in USDT in 24 hours as it acted as fiat on-ramps for BTC buyers and off-ramps for those that were cashing out. The situation has driven the demand for stablecoins like USDT, which has seen over $130 billion in USDT circulating across different crypto exchanges so far in November.
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Moreover, the nomination of Cantor Fitzgerald CEO Howard Lutnick by President-Elect Donald Trump created a positive sentiment within the crypto community. Cantor Fitzgerald has recently partnered with Tether and is on record to have acquired a 5% stake in Tether worth at least $600 million, only days after news about the Fitzgerald nomination.
Implication of Additional 3 Billion in USDT in 24 Hours in the Market
News about Tether acquiring 3 billion USDT in 24 hours hasn’t gone unnoticed, with speculation from Bitcoin developer Adam Back suggesting Trump’s pledge to have a Bitcoin strategic reserve could spark a rally that would propel Bitcoin to as high as $1 million, pulling stablecoins like USDT alongside it. As the price of Bitcoin surged, Tether has continued to experience a corresponding increase in adoption with the recent adoptions that have made USDT accessible to Ton Blockchain users on Brazilian crypto-exchange NovaDAX and Brasil Bitcoin as evidence.
The additional 3 billion in USDT in 24 hours has the potential to have various positive implications for the entire cryptocurrency market. Additional crypto assets mean more liquidity, which makes it easier for traders wishing to execute large transactions to proceed without necessarily causing a wide market slippage. Liquidity plays a significant role during highly volatile market periods as it enables the market to absorb any large order while maintaining market stability comfortably.
Conclusion
Furthermore, the additional USDT into the market will likely foster a robust trading environment since the extra liquidity will make the market less prone to whale manipulation. The eventual impact of the announcement that Tether added 3 billion dollars in USDT will eventually be a healthier market ecosystem and perhaps greater stable price discovery mechanisms.
Higher liquidity as a result of 3 billion USDT in 24 hours in the wider crypto market could also attract more institutional investors who may have feared treading into what they believed was a thin or volatile market.
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