Tether creates 1 billion USDT on Ethereum predicting approval of an ETF
Tether, a popular stablecoin, recently issued $1 billion worth of USDT tokens on the Ethereum blockchain, taking advantage of the increasing excitement surrounding a possible approval for a spot Ethereum ETF. This move contributed to a surge in the market, driven by the anticipation of the U.S. Securities and Exchange Commission (SEC) granting approval for trading an Ethereum ETF this Thursday.
The minting of the tokens was first reported by Whale Alert on Tuesday and subsequently confirmed by Tether CEO Paolo Ardoino. Ardoino clarified that this issuance was authorized but not yet in circulation, serving as inventory for future issuance requests and chain swaps.
This isn’t the first time Tether has created tokens amidst speculation about ETFs. In January, $1 billion USDT tokens were minted during talks of a Bitcoin ETF, with the price of Ethereum ranging from $2,204 to $2,294.61 on that day.
The value of Ethereum saw a 15% increase on Tuesday, alongside other top-performing cryptocurrencies, fueled by optimism surrounding the potential approval of an Ethereum ETF. The likelihood of approval rose from 25% to 75% after Fidelity updated its filings. Currently, Ethereum is priced at $3,726.78.
Some experts believe that this recent token creation is a strategic move in anticipation of an SEC approval for an Ethereum ETF. Ivan Sherbakov, CEO of Cryptorobotics, speculated that these tokens might be used as liquidity to boost the market ahead of any ETF-related news.
The rise in USDT tokens suggests that more capital will flow into the crypto market, particularly towards Ethereum and its associated coins. These newly minted tokens are being held in Tether’s treasury as “authorized but not issued.” Tether’s Transparency page reveals that as of May 20, there was $87.8 million worth of such USDT on Ethereum.
Meanwhile, Deutsche Bank analysts have raised concerns about Tether’s lack of transparency. They warn of potential severe repercussions if the USDT stablecoin were to collapse, considering its significant presence in the stablecoin market, which currently exceeds $160 billion in total capitalization. With a market cap of over $111 billion, Tether controls roughly 70% of the stablecoin market.
