Tether has issued an additional 250 million of their tokenized US dollars - USDT. That's according to a browser Omni Explorer.
Why it is important
- The previous ‘quantitative easing’ of the USDT token took place just over a month ago, on May 18. If you look at the BTC / USD chart, you can see that after each Tether’s additional issue, the bitcoin rate slightly rises.
- A similar pattern is observed after this emission. There was a fairly sharp jump in the price of bitcoin, breaking a downward trend. The rise in prices was also accompanied by an increase in trading volumes.
The creator of Litecoin Charlie Lee, commenting on the issue on his Twitter, noted that the release of the USDT tokens precedes the growth of the bitcoin price. In other words, the demand for tokenized dollars from holders of the U.S. dollar has turned out to be high enough for Tether to issue additional 250 million USDT.
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 https://t.co/zg2PEjGohv
— Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018
At the same time, Lee notes that this does not mean that the tokens will be immediately used to buy cryptocurrency. Nevertheless, a few minutes after the appearance of the recording in the Omni Explorer, the bitcoin rate rushed up to $6 300.
But then the question arises if the company has backed up the latest emission with fiat reserves. Tether earlier revealed results of an audit conducted by a law firm. The report confirmed that the company had more than enough reserves to back their obligations. The community criticized the firm for not conducting a proper audit to which Tether replied that no conventional method can be used to evaluate a cryptocurrency. The document also fails to mention if at any point the tokens were not fully backed by the dollar.
And this time Reddit users also reacted ambiguously following the news. For example, they accused banks of duplicity and unfair support of cryptocurrencies:
Also, users note that Tether always issues tokenized dollars in large lots, sending shockwaves through the market. In March, Tether issued 300 million coins, which made this latest, the second large USDT emission in the past few months.
USDT, also known as a stablecoin, is a cryptocurrency pegged to the U.S. dollar, as the company claims. The cryptocurrency community finds it hard to believe that all coins are really backed by by U.S. dollars.
By Ekaterina Ulyanova