Tether Shocks Crypto Market by Burning $1.8B USDT in One Ethereum Move

Tether has stunned the crypto market with a sudden removal of nearly $1.8 billion USDT. The transaction, flagged by Whale Alert, was carried out in a single move on the Ethereum network.

A total of 1,799,478,900 USDT was permanently burned from the Tether Treasury wallet. This event follows a similar transaction on March 1, when the company eliminated another $2 billion USDT.

The combined depletion from these two burns has wiped out $3.8 billion from the monetary supply for weeks. Marketers have demonstrated intense negativity toward the high magnitude of consecutive actions undertaken by the company.

Also Read: $3.4 Million XRP Stuns Market Amid Global Crash – Here’s What Happened

Tether has consistently stated that token consumptions during treasury transactions constitute its ordinary business operations. When users convert USDT into fiat currency, the company subtracts matching tokens from the blockchain ledger.

CEO Paolo Ardoino has explained multiple times that these coin redemptions, along with internal asset rebalances, drive the token removals. After this recent large-scale transaction, people are questioning Tether’s supply management.

$3.8 Billion Burn Hints at Shifts in Liquidity and Institutional Flows

The massive reduction in USDT supply suggests that Tether may be responding to changes in liquidity demand. Analysts speculate that the slowing use of USDT on centralized exchanges and DeFi protocols may be a factor.

Some experts believe institutional redemption requests serve as stronger evidence than burns to explain Tether’s injuries. Historically, Tether has withdrawn large amounts from circulation to address cash-out activities.

Recent burn transactions involving USDT did not affect supply levels, which remain near their historical peaks. Tether dominates the stablecoin market through its maintenance of the highest market values and trading volumes.

The company announced $2.85 billion in excess reserves and achieved record-breaking quarterly profits. Billions of dollars withdrawn suddenly have recently caught the attention of regulators and market participants.

Conclusion

Tether’s surprise move to burn $1.8 billion USDT in one Ethereum transaction has triggered intense market reactions. With stablecoin oversight tightening, the implications of such actions are being closely watched.

Also Read: Bitcoin Approaches $88K Breakout as Analysts Warn of Delayed Full Recovery

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