Crypto News – Tether and Circle Surge: $1.3 Billion Influx in One Day Amid Rising Odds for Ether ETF

Tether and Circle Infuse $1.3 Billion as Speculation Swirls Around Ether ETF Approval

Crypto News- As the crypto market heats up, stablecoins are leading the charge with a staggering $30 billion minted this year alone. Tuesday witnessed a frenzy of activity, with the anticipation of Securities and Exchange Commission approval for Ethereum exchange-traded funds driving the surge.

The heavyweights, Tether and Circle, spearheaded this influx, injecting $1.25 billion into the stablecoin ecosystem. Tether minted a colossal $1 billion USDT on Ethereum, while Circle chipped in with $250 million USDC on Solana.

This sudden surge in stablecoin supply is typically a bullish sign, indicating a growing appetite among traders to enter the crypto market. With stablecoins acting as a bridge to other cryptocurrencies, the stage is set for a potential Ethereum buying spree, particularly with the success of spot Bitcoin ETFs, which have already attracted a whopping $16 billion since March.

The Minting Process: Behind the Scenes

Tether and Circle follow a stringent process for minting new stablecoins. Starting with a thorough KYC procedure, including identification checks and sanctions screenings, they ensure compliance and security. While Tether allows individual traders to mint USDT post-KYC, Circle reserves large-scale minting for registered businesses.

Once KYC is cleared, users deposit fiat currency into designated bank accounts, held in reserve to back each stablecoin with at least $1. After verification, stablecoins are issued to the user’s wallet address.

The withdrawal process follows a similar route, with users exchanging stablecoins for fiat, prompting the issuer to remove tokens from circulation and transfer the equivalent USD to the user’s bank.

Crypto Demand: A Driving Force

The surge in stablecoin minting reflects a growing demand for crypto exposure. Notably, Tether adopts a unique approach, where newly issued tokens can be ‘authorised but not issued,’ a strategy to streamline operations and mitigate security risks.

Currently dominating the stablecoin realm, Tether boasts a market capitalization of $111.3 billion, closely followed by Circle’s USDC at $32.7 billion. Both stablecoins enjoy interoperability across 70+ blockchains.

In tandem with stablecoin growth, the total crypto market capitalization has soared from $1.8 trillion to $2.7 trillion this year, underlining the bullish sentiment sweeping the industry.

In essence, stablecoin minting serves as a barometer for crypto enthusiasm, reflecting investor confidence and paving the way for further market expansion.

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