Tether has issued $250 million worth of new USDT tokens, moving it into 10th position by market value and injecting some much needed optimism into the cryptocurrency community. The move saw Tether surpass Tron (TRX) as its overall market value soared to $2.7 billion.
Tether’s USDT token is a stablecoin cryptocurrency with a 1:1 ratio against the US dollar. It is designed to assist exchanges in essentially trading with the US dollar in the event that an agreement with a traditional fiat bank has not yet been made.
Since the announcement Tether’s 24-hour trading volume of $4.2 billion has been second only to Bitcoin (BTC).
Many see the creation of the new tokens as a clear indication that there is fresh capital entering the cryptocurrency markets. Tether state that new tokens are only created when fiat USD currency is deposited into their reserve accounts. While admittedly the investor may not immediately trade the tokens, it’s certainly a good sign for a market that has recently been very bearish.
The last time Tether issued a fresh batch of tokens of this size was over a month ago and the price of Bitcoin subsequently rose by around 5 percent. Unfortunately, the price quickly dropped soon after, likely due to unrelated incidents.
Controversy And Concerns
Since its inception, there have been a number of concerns regarding Tethers solvency, due in part to the fact the company is yet to release an independent audit. A report earlier this month by the University of Texas supported a long-held belief that unbacked USDT tokens may have been used to manipulate the price of Bitcoin during its meteoric rise back in December last year. Tether has denied the allegations.
In response to the controversy, a report was compiled by legal firm FSS which appears to indicate that all USDT tokens are fully backed by US dollars. While not entirely conclusive, the report has gone some way towards satisfying some of Tether’s more vocal critics.