Tether
Stable coin Tether has issued $250 Million in tokens this afternoon, a move which some crypto influencers are saying is a positive sign for cryptocurrency market prices.
This afternoon, Litecoin founder Charlie Lee tweeted :
“Generally, this has been a precursor of price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn’t mean they will buy right away. DYOR”
Tether has made a name for itself as the go-to stable coin for crypto investors initially entering the market and getting ready to buy, or selling in order to park their profits somewhere that is immune to volatility yet still embedded in the crypto world.
The total token supply of Tether is currently at $3 Billion, a number that is not reached without controversy, as many have questioned whether Tether could possibly be backed 1 to 1 with that many dollar reserves (especially in a bear crypto market).
A former big 4 auditor and CPA claims that “Without a full audit, we have no evidence that the entity has net assets. They could have $1 or $2.5B in liabilities, for all we know, thus rendering the true cash backing USDT (net of liabilities) unknowable”.
Although the news of newly issued Tether tokens could be a bullish sign for the crypto markets, it could also signal a fragile infrastructure that is packing on too much weight. If a mass liquidation event where to occur and supply of US dollars could not meet demand, it could spell big trouble for the stable coin.
It remains to be seen how this news will affect crypto markets. Some like Charlie Lee are cautiously optimistic, while others remain pessimistic in the face of Bitcoin price reaching a new low for the year.
Regardless, what remains clear is that further investigating must be done to decipher exactly how much fiat currency is backing Tether, and whether the stable coin can sustain another issuing event of this size in the near future.