Tether, a popular stablecoin, created $1 billion worth of USDT tokens on the Ethereum blockchain this past Tuesday, taking advantage of the increasing excitement surrounding the potential approval of a spot Ethereum ETF.

The surge in the market was fueled by optimism that the U.S. Securities and Exchange Commission (SEC) would give the green light for trading a spot Ethereum (ETH) ETF this Thursday. Whale Alert was the first to report the token minting, which was later confirmed by Tether CEO Paolo Ardoino. He clarified that the newly minted tokens were authorized but not yet issued, and would be used for future issuance requests and chain swaps.

This isn’t the first time Tether has minted tokens in response to ETF speculation. In January, $1 billion in USDT tokens were minted during rumors of a spot Bitcoin ETF. On that day, the price of Ethereum (ETH) fluctuated between $2,204 and $2,294.61.

The value of Ethereum has surged by 15% on Tuesday, alongside other top-performing cryptocurrencies, in anticipation of an Ethereum ETF approval. The likelihood of approval jumped from 25% to 75% after Fidelity updated its filings. Currently, Ethereum is priced at $3,726.78.

Many believe that Tether’s recent token minting is a strategic move in anticipation of an SEC approval for a spot Ethereum ETF. Ivan Sherbakov, CEO of Cryptorobotics, speculated that these tokens could be used to boost market liquidity ahead of any ETF-related news.

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

This development comes as Deutsche Bank analysts raise concerns about Tether’s lack of transparency. They warn of potential severe repercussions if the USDT stablecoin were to collapse, given its significant presence in the stablecoin market, which currently exceeds a total capitalization of $160 billion. Tether’s market cap is over $111 billion, controlling approximately 70% of the stablecoin market.