Tether Issuance Hits $25 Billion as USDT on Exchanges, DeFi Reaches New High

Key Takeaways

  • Tether’s USDT supply reaches $25 billion, accounting for more than 75% of the total stablecoin supply. 
  • USDT reserves on exchanges reached an all-time high, according to crypto analytics firm Crypto Quant. 
  • Tether recorded its second-largest surge in monthly issuance since 2020.
  • The percentage share of USDT in DeFi also nears its all-time high. 

“This latest milestone reflects the trust and growing popularity of Tether,” Paolo Ardoino, the CTO of Tether, shared with Crypto Briefing as the stablecoin surpassed the $25 billion benchmark.

Tether’s Unprecedented Growth

In January 2021, USDT supply grew from 21.07 billion to 25 billion, a 3.8 billion increase second only to the monthly issuance in September last year. Despite the pending lawsuit, the company continues to issue new tokens, which incited fear of a crypto market sell-off at the beginning of the month. 

USDT supply increased by 5.5 billion during September 2020 as printing began on Aug. 30, 2020, with a total supply close to $10 billion. 

Tether’s supply at the beginning of the year was 4.1 billion. Its issuance accelerated in March after the global market plummeted due to the liquidity crisis sparked by COVID-19 lockdowns. 

The stablecoin has grown steadily at a rate of 1.6 billion every month since the COVID-19 crash.

DeFi Back in Trend

The close cyclic relationship between the DeFi markets and the USDT supply on smart contracts was also evident with increased inflows this month.

The percentage of USDT in smart contracts plunged from over 10% to 6% after the DeFi market cooldown. Token prices have rebounded since Nov. 6, 2020, but USDT’s rise in DeFi did not come until the start of this month.

Its share in DeFi has surged during January, mimicking the rise in July and September last year. Out of the 3.8 billion printed in January, 1.34 billion (or 35% of the newly printed supply) has found its way back to DeFi. 

Last but not least, the exchange reserves have grown from 3.1 billion USDT to 4.12 billion USDT, an all-time high for the stablecoin. A Tether spokesperson shared with Crypto Briefing the following: 

“Many digital token spot exchanges now denominate in USDT pairs rather than Bitcoin. USDT is also increasingly being used in remittances and innovative projects in the digital token ecosystem, including those in the nascent space of decentralised finance (DeFi).”

Part of the reserve growth is coming from a broader sell-off in cryptocurrencies. Nevertheless, it indicates that more money is sitting on the sidelines waiting to buy the dip. 

The author held Bitcoin at the time of publication. 

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