Tether (USDT) Back in the Game, Lifts Bitcoin to $9,000

The Tether minting wallet printed 300 million new tokens in the largest grant to date.

After an almost two-month hiatus, the Tether minting wallet brought a new tranche of tokens, this time 300 million USDT in one transaction. Immediately, the new tokens were sent to a known Bitfinex address.

 

The minting wallet has printed hundreds of millions of USDT within days in December and January, and the gap in new issues coincided with a slide of more than 65% from the peak Bitcoin price.

The event coincides with a planned maintenance on Bitfinex:

It is unknown what effect the USDT may have, or whether bot trading would continue even if usual trades are locked down for about two hours.

Is Tether Backed by Dollars Yet?

The sudden and large-scale printing of USDT continues to raise questions whether the tokens are in fact redeemable at any time for dollars. For a while, the Tether company had no recourse to a banker, after parting ways with Wells Fargo. Later, the company claimed to be serviced by a Polish bank, but there has been no audit of the bank accounts.

The company, registered in Puerto Rico, has not shown a local bank to handle the transactions. But BitMex offered circumstantial evidence:

The inflow of funds in Puerto Rico may be quite a stretch, and the community disparaged the attempt to show that Tether has actual funds. The demand for an audit continues.

Binance Absorbs USDT

Binance now has a balance of more than 371 million USDT, paired with Bitcoin, but also other hot assets, including the most recent addition of QTUM. Technically, this allows users to trade without the complexities of handling cash.

But the presence of USDT may be distorting the prices, and hiding the fact that real dollar liquidity is rather scarce.

Even so, the BTC market price increased to $9,133.47, up more than 6% in the past day, and picking up again. Trading volumes remain relatively thin, and the share of Tether trading is more than 14% of the entire crypto market. At the moment, trading Bitcoin against the dollar takes up more than 23% of the market, but the gap between USD and USDT gets smaller.

But the most curious event is the sudden recovery of BTC prices immediately after the printing of Tethers. At the moment, the BTC price on Bitfinex is lower, at $9,049.20, and the coin trades at a premium of around 9,300 against the Korean Won.