On August 13, Tether’s treasury minted an additional $1 billion worth of USDT, adding to its reserves on the Ethereum network. According to Whale Alert, the transaction was noted as part of Tether’s strategy to maintain liquidity. Paolo Ardoino, CEO of Tether, explained that the transaction was an “inventory replenish”—tokens authorized but not immediately issued. This ensures that Tether has sufficient reserves to meet future demand without flooding the market with excess tokens.

Tether balance on crypto exchanges. Source: Glassnode

As of August 14, approximately $60 million of the newly minted USDT had already entered circulation, reflecting strong demand for the stablecoin. Tether’s transparency page reported that $941.72 million in USDT remains authorized but has not yet been issued.

Record High Exchange Balances and Market Implications

Tether’s USDT balance across crypto exchanges reached a record 20.339 billion on August 13, indicating that investors are preparing to deploy these reserves into the crypto market. Historically, such an increase in Tether reserves has occurred in both bear and bull markets. During bearish periods, traders often convert volatile assets into stablecoins for safety, while in bullish times, they accumulate stablecoins to purchase crypto assets at opportune moments.

Source: X

Recent data suggests a potential bullish scenario. Tether Treasury recently transferred $141.50 million USDT to the crypto trading firm Cumberland, which subsequently distributed the funds across major exchanges like Binance, Coinbase, and Kraken. Over the past week, Cumberland has moved $1.08 billion in USDT to exchanges, implying that institutional players may be positioning themselves for potential market shifts ahead of the Federal Reserve’s upcoming rate decision.

Market Optimism on the Horizon?

If the Federal Reserve signals a rate cut in September, as suggested by CME data, it could trigger a market rally.

Source: X

Markus Thielen, head researcher at 10x Research, noted that nearly $2.8 billion was issued by Tether and Circle earlier in the week, indicating fresh capital injections into the crypto market by institutional investors. Should this trend continue, Bitcoin and other cryptocurrencies could see significant gains in the near future.