The world’s largest stablecoin, Tether ((USDT), has expanded its circulating supply after nearly three months of drawdownsin what could be a sign that crypto markets are slowly recovering.
The first mintage in almost three months occurred on Friday, and there have been three more (the last one on Tuesday), according to CoinMarketCap. Nevertheless, USDT injections have been small, lifting Tether’s market cap by just 0.7% or just under $500M.
According to Tether’s transparency report, there are now 66.3 billion USDT in circulation. This gives the stablecoin a total market share of around 43%..
Tether supply reached its all-time high in early May, when it topped 83 billion USDT. The collapse of the Terra ecosystem, the resulting cryptocurrency contagion, and large-scale redemptions forced the company to reduce the outstanding supply, which fell 21% to a low of 65.8 billion at the end of July.
This has allowed rival company Circle to increase the market share of its stablecoin USD Coin (USDC), which now has a 36% share with a market capitalization of USD 54.5 billion.. As Cointelegraph reported last month, USDC volume on Ethereum even outpaced Tether for a while as the number two stablecoin continues to catch up.
During the weekend, Binance CEO Changpeng Zhao gave his opinions on the number of stablecoins that are about to re-enter the marketsstating:
“3 of the top 10 are stablecoins, which means there is a lot of fiat on the sidelines, ready to come back in. If people wanted to get out of crypto, most would not have stablecoins.”
Stablecoins currently account for 13.6% of the entire cryptocurrency market capitalizationwhich is close to its all-time highs.
The cost-of-living crisis caused by rising global inflation may have curbed cryptocurrency investment and speculation for retail traders. However, those living in countries with extreme inflation levels, such as Argentina, have latched onto US dollar-pegged stablecoins as a hedge against their own local currencies.
Tether acknowledged the benefits of holding stablecoins, stating that USDT “allows Argentines to access a market that is truly global and frees them from local black markets.”adding that it also “allows them to hold Tether in a way that cannot be seized by the government, unlike local bank accounts.”
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