As an analyst with over two decades of experience in the financial industry, I find Tether’s recent announcement of a large cross-chain swap intriguing. The sheer scale of this operation indicates that we are witnessing a significant shift in the digital asset market. The fact that this transfer is taking place on behalf of a major exchange underscores the growing importance of stablecoins as a bridge between traditional and decentralized finance.
2024 marks the date when Tether, the stablecoin issuer, plans to transfer over 2 billion units of Tether-USD (USDT) from multiple blockchain platforms to the Ethereum network on November 6th.
As per Tether’s announcement, a total of approximately 2.5 billion USDT (one billion on Tron, six hundred million on Avalanche C-Chain, three hundred million on NEAR protocol, and sixty million on the EOS network) are planned to be moved to the Ethereum network.
A representative from the stablecoin company clarified that they executed a cross-chain swap for an undisclosed, significant exchange, moving its USDT assets stored in multiple offline wallets over to the Ethereum network.
Tether additionally guaranteed investors that this significant transfer across multiple chains wouldn’t impact the overall quantity of USDT in circulation.
Tether CEO clarifies reserves backing USDT
A significant movement of USDT across multiple blockchains occurs in conjunction with a rumor, yet to be confirmed, from The Wall Street Journal suggesting that U.S. authorities are scrutinizing the stablecoin company due to accusations of money laundering and breaches of sanctions regulations.
Following the announcement, crypto prices momentarily dipped as worry, indecision, and apprehension took hold among investors. The uncertainty about the biggest traditional currency exit for digital assets led Tether CEO Paolo Ardoino to provide details on the company’s reserve assets that back its U.S. dollar-linked stablecoin at an event held by PlanB in Lugano, Switzerland.
This reserve holds around $100 billion in U.S. Treasury bills, approximately 82,000 Bitcoins (currently valued at about $6.2 billion), and 48 tons of gold that reached a record high of $2,790 per ounce against the U.S. dollar recently.
By October 2024, Tether’s USDT had reached a market cap of $120 billion. This substantial market capitalization, frequently viewed by traders as an indicator of enhanced trading activity within the digital assets sector, is typically interpreted as a positive signal for asset values.
On the other hand, information from Chainalysis indicates that stablecoins are being utilized more frequently as a form of long-term savings in economies where the national currency is experiencing rapid devaluation, rather than for purposes of market speculation.
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2024-11-07 00:50