In a recent and noteworthy development that has attracted the attention of the crypto-market, Tether Treasury has created $1 Billion USDT over the Ethereum network, which adds to the growing Tether issuance this year. This latest action means that the total USDT on Ethereum by Tether has increased to a whopping 23,000 million in 2024. Market participants are closely observing these developments, particularly as the trading firm Cumberland directs almost $906.7 million USDT into centralized exchanges (CEXs). The flow of investments this has brought into the market has fuelled speculation on the changes that the market will make to Bitcoin and other crypto-currencies.
Cumberland’s Role in USDT Transfers
After Tether mints 1 billion USDT, Soon after, 183.2 million USDT were transferred to Cumberland, a leading trading company. The current activities of Cumberland have drawn much attention from the crypto analysts as a means of distributing stablecoins across the CEXs. As per statistics garnered from Spot On Chain, Cumberland has been receiving a total of 953 million USDT from Tether from the time the bearish market kicked off on August 5, 2024.
This distribution has been widespread, with the likes of Coinbase, Kraken, OKX, Binance, and Bullish among the exchange that have received this distribution. In the past one day only, through its network, Coinbase was able to attract a net credit of 106.07 million USDT, making the total amount of USDT Cumberland transferred to it since August 6, 468.96 million USDT. The same source shows that Kraken, another key participant, saw $64.13 million USDT in the same period, amounting to $207.58 million USDT.
Although there has been no deposits in the last one hour to Binance or Bullish, they have combined pulled a total of 81.64 million USDT and, respectively, 32 million USDT since the beginning of August. This strategic distribution proves that Cumberland is an essential part of increasing liquidity in important trading venues.
Bitcoin Traders Eye Stablecoin Inflows
The large scale buying of USDT on CEXs has not been overlooked by Bitcoin traders who consider such movements as signs of future trends to predict. Some digital asset research analysts in 10x Research, an Frankfurt based research solution firm have opined that the $2.5 billion stablecoin inflow or the latest $1 billion USDT mint may well be signaling a bullish phase for Bitcoin.
According to 10x research, the movements in these financial products have been noted to be ‘buoyed by stablecoin inflows before market uptrend. The firm also noted that a large amount of the USDT and Circle-issued stablecoins seen over the last week indicates new money may be coming into the market. Such a surge in demand could lead to higher prices in the cryptocurrencies such as bitcoin and others, a situation that has been recurring lately.
These outflows are watched closely by crypto market participants on the grounds that they are normally tested as positive or negative winds that may affect market developments enormously. The direct relationship between stablecoin activity and bitcoin price has been an interesting discussion point especially in the current market environment.
The Minting Pattern and Its Implications
The fact that 1 billion USDT has recently been minted on Ethereum can be attributed to certain patterns identified with regards to Tether in 2024. Tether, in July for instance, created a similar quantity in the Tron network which served to provide more market depth and lay the foundation for a higher bias in Bitcoin and other cryptocurrencies. The January 2024 minting of 3 billion USDT can also be a good example of large-scale issuance which continued to have bullish trends in the crypto market for some time longer than mentioned above.
Circulating supply data from CryptoQuant shows that the value has risen by 30 billion since late 2022. They have most importantly contributed to increase market supply of the stocks and therefore improving market liquidity and investors’ confidence during periods of fluctuation. The fact that Tether performs these minting operations at optimal points within its economy and in great volumes indicates that it is trying to artificially regulate – and potentially manipulate – the market.
In the current world of cryptocurrencies, the consequences of such operations as minting of stablecoins cannot be questioned. The 1 billion USDT flowing into the Ethereum network can be seen as a signal to many, as well as Cumberland’s inflow to major CEXs – which can, in the future, potentially affect Bitcoin’s prices.
A Quick Wrap Up
It was Tether’s newest mint at $1 billion USDT on Ethereum, which combined with Cumberland’s $906.7 million injection into CEXs, prepared the ground for possible market shifts. These significant developments are clear evidence of a propensity for more stablecoin proliferation, stablecoins’ impact on the crypto market and, in particular, their contribution to issues of liquidity and, again, prices. While traders and investors keenly watch these flows, the coming weeks will indicate whether these actions will make or mar the positive market turn especially for bitcoin and other altogether tokens.
Such a pattern of issuing and selective releasing of USDT is evidential to the necessity of tracking market actions because they are always latent to future direction in cryptocurrencies – as globally recognized as highly volatile assets.
