The stablecoin supply of cryptocurrencies has been in a strong uptrend in March 2020. Last night, $60 million was added to the inventory of Tether, as the firm prepares for issuance of more USDT.
60,000,000 #USDT (59,854,340 USD) minted at Tether Treasury.
Paolo Ardoino, CTO of Bitfinex and Tether tweeted on the update,
PSA: inventory replenish. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests.
The total liability (asset issued on-chain) has increased to $6.43 billion. As reported only a week earlier, Tether (USDT) supply was at $6.19 billion; it has risen by $240 million since then. Nic Carter, the founder of Coin-metrics tweeted,
As the traders remain in the fear of a downtrend due to the economic slowdown, the increase in stablecoin volume points towards bulls in the future.
In the past as well, the rise in the supply of Tether has acted as a precursor to a bull season in crypto markets. The last time a rise in the supply was witnessed was before the bull run of 2019 in May 2019; USDT increased from $2.56 billion to $3.28 billion in less than a month.
The massive QE program which the Governments of the world ($6 trillion by the US alone) have undertaken to address the coronavirus crisis might also be influencing an increase of USD based stable coins.
Apart from acting as a fundamental bullish indicator, Tether also adds sufficient liquidity for swings in price. Sid Shekhar, co-founder of market tracker TokenAnalyst told the media,
The more Tether there is in existence (and specifically the more sitting on exchanges), the more there is opportunity for sharp swings