Many commentators in the cryptocurrency space are writing that there has been an unprecedented increase in demand for USD-backed stablecoins. However, only the Tether Treasury seems to be printing more of its stablecoin at this point.

The past two months have seen a drastic increase in USDT entering the market. Recently, Tether Transparency reported that current balances of USDT amount to a whopping $7.4 billion.

Printing USDT Like Never Before

The fact that there is close to $7.5 billion worth of USDT currently issued is stunning. However, let’s put that in perspective to really show how quickly this number has risen in the past month alone.

On March 27, BeInCrypto reported that Tether (USDT) surpassed the $6 billion mark. Then, on April 19, Tether topped $7 billion. Now, on April 24, it is sitting at close to $7.5 billion.

Just a few days ago, BeInCrypto reported that Tether had issued over $1 billion in USDT in under 25 days. That’s around $40M per day — and it’s only speeding up. If we crunch the numbers now, Tether has added $1.5 billion worth of USDT in just 28 days.

So, that begs the question, where is all this supposed demand coming from, and does it even exist?

Major Outlets Miss the Story

Recently, an article by Coindesk claimed that we are amid a new wave of ‘crypto-dollarization,’ and that the COVID-19 pandemic has increased the demand for USD-backed stablecoins. That explains why Tether Treasury is issuing USDT like never before — or so the narrative goes.

However, the charts presented in the story itself just don’t add up. As Jakal (@intel_jakal) writes,

“All other stablecoins have flatlined except Tether issuances. That alone should trigger the bullsh*t meter.”

Moreover, why would a pandemic lead to institutional investors flocking to Tether (USDT) — the same entity that was accused of using its digital dollar to hid $850M of ‘missing’ funds? If you recall, the NY Attorney General sued Bitfinex in April 2019 because of this.

Other Stablecoins See No ‘Demand Surge’

For comparison, the Coinbase-backed stablecoin USDC has not seen a surge in demand anywhere close to Tether. That’s strange for a few reasons. Coinbase has licenses in major U.S. states and abroad and is generally considered one of the most regulatory compliant exchanges. This is not to say that investors should flock to USDC — it merely underscores how disproportionate the USDT surge has been compared to other stablecoins.

Commentators should not be drawing conclusions on market demand based on USDT alone, especially given its controversial history. An actual surge in dollar-backed stablecoins would and should be noticeable across the entire market.

Instead, we are left with a situation where Tether issues $1.5 billion USDT in less than a month, while the rest of the stablecoin market stays relatively flat. That’s enough to sound alarm bells and it demands a closer look.