Tether crypto exchanges balance hits record high as Treasury prints $1B USDT

Tether (USDT) balances on crypto exchanges hit a record high of 20.339 billion on Aug. 13, signaling investors are gearing up to deploy these stablecoins into crypto assets ahead of the United States Federal Reserve’s September rate decision.

Tether Treasury mints $1B worth of USDT

Tether’s record balance across crypto exchanges followed the minting of $1 billion worth of stablecoin by its namesake treasury. On Aug. 13, data tracking platform Whale Alert noted that Tether had added another $1 billion on the Ethereum network.

Paolo Ardoino, the CEO of Tether, clarified that the recent $1 billion USDT transaction was an "inventory replenish," emphasizing that it was "authorized but not issued." Simply put, the tokens are reserved for future issuance requests and chain swaps.

In traditional finance, inventory replenishment involves ordering stock to meet demand without overstocking. Similarly, Tether creates USDT to maintain sufficient reserves, holding them in its treasury until needed, ensuring smooth liquidity management without immediately releasing them into circulation.

According to data from the Tether Transparency page, $941.72 million in USDT stand “authorized but not issued” on Ethereum as of Aug. 14. In other words, approximately 60 million USDT from the recent $1 billion mint have already entered circulation, highlighting the strong demand.

Are USDT investors waiting on the sidelines?

Historically, Tether's balance on exchanges has increased during both bear and bull markets.

In bearish conditions, the rise in USDT reserves often signals that traders convert volatile cryptocurrencies into stablecoins, seeking safety amid market uncertainty. Conversely, during bull markets, USDT accumulation may indicate that traders are stockpiling stablecoins to deploy them for crypto purchases when prices drop.

Recent signs show the potential for a bullish case.

For instance, on Aug. 13, Tether Treasury sent $141.50 million USDT to crypto trading firm Cumberland. The latter forwarded the capital across multiple crypto exchanges, including Binance, Coinbase, and Kraken, according to Lookonchain.

Cumberland has sent $1.08 billion in USDT to crypto exchanges in over a week, suggesting that institutional players might be positioning themselves for potential market volatility ahead of the Fed’s September rate decision.

If the Fed's decision leans towards a rate cut—as the CME data strongly indicates—it could spark optimism in the market.

"Nearly $2.8 billion was issued by Tether and Circle earlier last week, indicating that some institutional investors are injecting fresh capital into the crypto market," argues Markus Thielen, head researcher at 10x Research, in his latest report, adding:

"If this trend of issuance (not just minting) continues, Bitcoin could see further gains."