Tether issues 1 billion USDT on Ethereum in anticipation of ETF approval

Tether has recently minted $1 billion worth of USDT tokens on the Ethereum blockchain, taking advantage of the growing excitement surrounding the potential approval of a spot Ethereum ETF. The surge in the market was fueled by the optimism that the U.S. Securities and Exchange Commission (SEC) may grant approval for trading a spot Ethereum (ETH) ETF later this week.

The minting of tokens was first reported by Whale Alert on Tuesday, and was later confirmed by Tether CEO Paolo Ardoino. He clarified that the newly minted tokens were authorized but not issued, and would be used as inventory for future issuance requests and chain swaps.

This is not the first time Tether has minted tokens in anticipation of a spot ETF approval. In January, they minted $1 billion USDT tokens during rumors of a spot Bitcoin ETF, when the price of Ethereum ranged from $2,204 to $2,294.61.

The value of Ethereum has surged by 15% on Tuesday, along with other top-performing cryptocurrencies, as speculations around an Ethereum ETF approval have increased from 25% to 75% following updates in Fidelity’s filings. Currently, the price of Ethereum stands at $3,726.78.

There are speculations that the recent minting of tokens is a strategic move in anticipation of an SEC approval for a spot Ethereum ETF. Ivan Sherbakov, CEO of Cryptorobotics, believes that these tokens may be used as liquidity to boost the market ahead of any ETF-related news.

The increase in USDT tokens suggests that more funds will flow into the crypto market, particularly into ETH and Ethereum coins. These newly minted tokens are held in Tether’s treasury as “authorized but not issued.” As per Tether’s Transparency page, there was $87.8 million worth of such USDT on Ethereum as of May 20.

Meanwhile, Deutsche Bank analysts have raised concerns about Tether’s lack of transparency, warning about the potential risks if the USDT stablecoin were to collapse. Tether currently dominates the stablecoin market with a total capitalization exceeding $160 billion, and a market cap surpassing $111 billion, controlling approximately 70% of the stablecoin market.

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