Tether minted $1 billion USDT tokens on the Ethereum blockchain, leveraging the growing anticipation around a potential spot Ethereum ETF approval.

The market surge was driven by optimism that the U.S. Securities and Exchange Commission (SEC) might approve a spot Ethereum (ETH) ETF for trading this Thursday.

Whale Alert reported the minting on Tuesday, which was confirmed by Tether CEO Paolo Ardoino. Ardoino stated,

“PSA: 1B USDt inventory replenish on Ethereum Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.”

This is not the first instance of Tether minting tokens amid ETF speculation. In January, Tether minted $1 billion USDT tokens during rumors of a spot Bitcoin ETF. On that day, Ethereum (ETH) prices ranged from $2,204 to $2,294.61.

Ethereum Surging

Ethereum’s value has risen by 15% on Tuesday amid speculation, with other top-performing coins also experiencing increases. This rise is attributed to the higher likelihood of an Ethereum ETF approval, which increased from 25% to 75% after Fidelity updated its filings. The current price of Ethereum is $3,726.78.

Some believe this recent minting is a proactive measure for an SEC approval of a spot Ethereum ETF. Ivan Sherbakov, CEO of Cryptorobotics, speculated that the tokens

“will be used as liquidity to pump the market ahead of ETF news.”

Use Cases for Tether

This increase in USDT tokens suggests that more funds will flow into crypto, particularly into ETH and Ethereum-based coins. These tokens are held in Tether’s treasury as “authorized but not issued.” According to Tether’s transparency data, there was $87.8 million worth of such USDT on Ethereum as of May 20.

Deutsche Bank analysts have highlighted concerns over Tether’s transparency. They warn of potentially severe consequences if the USDT stablecoin collapses, given its dominant position in the stablecoin market, which currently exceeds $160 billion in total capitalization. Tether’s market cap surpasses $111 billion, controlling around 70% of the stablecoin market.

Stay updated with the latest news on cryptocurrencies, investing, and finance on Global Crypto News.

Post Views: 7