Cryptocurrency startup Tether issued $250 million in new tokens on Monday, sparking speculation that a bitcoin price rally could be inbound.
That Tether is issuing new tokens is an indication that new capital is flowing into the cryptocurrency markets, since — at least according to the company — tokens are created when individuals or organizations deposit physical dollars into Tether’s reserve bank accounts.
Monday’s creation of 250 million new tokens marked the first significant tether issuance since May 18, when Tether issued $250 million in USDT. The bitcoin price rose in the days following this event, from $8,100 on May 18 to $8,500 on May 21. However, that rally proved to be short-lived, and the bitcoin price shed more than $2,300 in the weeks that have followed.
Questions have long swirled about Tether’s solvency, particularly since the firm has never released an independent audit of its balance sheet.
The token currently has a circulating market cap of more than $2.6 billion, making it the 11th-largest cryptocurrency. According to Tether’s “Transparency” page, the firm is holding more than $3 billion in its reserve bank accounts, indicating that it could issue approximately $400 million in new tokens without exceeding its assets.
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