Tether Treasury has just completed one of its most significant USDT burns ever. 102,155,590 USDT was reportedly just redeemed and then destroyed.
Tether Treasury’s USDT issuances are a common occurrence in the cryptocurrency market. They’ve been linked to Bitcoin’s price with an accuracy rate of around 70% for predicting rallies, as previously reported by BeInCrypto. However, what consequences can we expect for the market when Tether Treasury decides to burn USDT? It’s currently unclear, but that’s precisely what the largest stablecoin recently did.
Largest USDT Burn Ever?
Today, Whale Alert (@whale_alert) picked up a massive USDT burn, which saw 102,155,590 USDT destroyed. The burn was confirmed by Bitfinex CTO Paolo Ardoino shortly after. An announcement was also made on Tether’s official media channels.
Burns of this size at Tether Treasury are relatively rare. However, they have become more common in 2020. On January 20th, BeInCrypto reported that Tether Treasury destroyed some $64.6M in USDT in a surprising move. It’s currently unclear whether this burn was due to an entity’s request or a pool of individual redemptions. There’s also room for speculation about a possible shake-up at Tether itself, which necessitated a significant USD cash-out. Thus far, no explanation has been given.
Cryptocurrency Markets Continue to Rally
$102M of USDT being permanently scrapped is large enough to cause a stir in the market. So far, however, cryptocurrency markets have shrugged it off. Bitcoin is currently up +4.69% on the daily, and most other altcoins appear to be holding strong to their daily gains.
Overall, the token burn runs counter to expectations for 2020. Analysts have been arguing that some $6B in stablecoins is poised to enter the market this year. This includes not only Tether (USDT), but also USD Coin (USDC), Paxos Standard (PAX), Gemini Dollar (GUSD), DAI, and others. However, Tether Treasury’s most recent burn does not inspire much optimism about new money flowing coming into the market.
Investors will have to keep their eye on Tether’s future activities to confirm whether we should be worried about the stablecoin’s viability. This may just be the start of larger USDT burns in the future.