Fed Rate Reduction Sparks $1B USDT Influx for Tether as Crypto Markets Pursue Liquidity
- Tether minted $1B USDT on Ethereum, boosting total supply to $6B amid Fed rate cuts driving liquidity demand. - USDT now dominates 56% of global stablecoin market ($172.8B cap), serving cross-chain transactions and crypto hedging. - Ethereum hosts 45% of USDT supply ($81B), while Tether's $4.9B Q2 profits and $500B valuation target highlight its financial strength. - Regulatory scrutiny and competition with USDC ($74B) pose challenges as Tether expands U.S. compliance efforts via USAT.
Tether has notably increased its stablecoin circulation this week by minting an extra $1 billion
The Federal Reserve’s decision to lower rates by 0.25 percentage points on September 17 spurred Tether’s latest round of minting. With borrowing costs dropping, traditional savings have become less attractive, prompting investors to seek alternatives like stablecoins. Paolo Ardoino, Tether’s CEO, noted that the company ramped up USDT production in response to changing economic conditions, positioning the stablecoin as a key liquidity tool for those navigating riskier markets. According to DeFiLlama, 45% of all USDT is now on Ethereum, while
Tether’s recent moves are in step with broader industry shifts, such as the introduction of its U.S.-compliant stablecoin, USAT, designed to meet GENIUS Act requirements. The company also reported $4.9 billion in net profits for the second quarter of 2025, backed by $162.5 billion in reserves. These achievements reinforce
The recent spike in USDT supply is impacting both liquidity and investor strategies. With $81 billion in USDT on Ethereum and $78.6 billion on Tron, the stablecoin’s presence across multiple chains is improving trading speed and minimizing slippage for large trades. This influx of liquidity could further accelerate adoption in decentralized finance (DeFi) and among institutional players. Still, experts warn that increased regulatory attention, especially in the U.S., may affect future issuance. Tether’s recruitment of former White House crypto adviser Bo Hines to oversee USAT’s U.S. rollout demonstrates its commitment to navigating regulatory challenges while expanding its footprint.
Tether’s lead in the stablecoin market is set to grow as it faces off against competitors like Circle’s
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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