According to data flagged by the Whale Alert, Tether burned a massive $1.8 billion USDT through a single Ethereum transaction. The transaction permanently removed 1,799,478,900 USDT from the circulation and sent directly from the Tether Ministry of Finance's address.
The latest burn tracked a similar US$2 billion USDT removal on March 1, bringing the total destroyed in recent weeks to around $3.8 billion, bolstering debate over tether supply management.
Why is the tether burning on USDT?
Marketwatchers speculate about the reasons behind these massive burns. One theory suggests that it is a strategic response by Stablecoin publishers to potentially slow demand for centralized exchange or USDT within Defi protocols.
Another common belief is that these burns reflect important reimbursement requests from the agency's clients. The tether itself has been previously pointed out as a trigger to remove a large amount of USDT from the market.
Related: Tether injects $1.8 billion in exchange, driving a surge in Bitcoin to 76,66K
Tether CEO Paolo Ardoino frequently describes USDT's burning as part of everyday financial operations. He makes it clear that when the USDT is issued, the token will normally be deleted if the holder redeems for cash.
Burns can also occur during operational rebalancing across various blockchain networks. However, the enormous size of these recent burns has attracted attention, especially as the crypto market remains very sensitive to changes in liquidity.
Could Tether's USDT Burns have an impact on the crypto market?
Despite these burns, it is worth noting that the USDT's total circulation supply is hovering near an all-time high, and Tether remains the dominant stubcoin by market capitalization.
Related: Tether Effect: Stablecoin Publisher Mint $400 billion on 402.5 billionaires list
The Stablecoin company recently reported that it had recorded $2.85 billion in excess reserves and quarterly profits. Still, all major USDT Burns are attracting attention as regulators look at Stablecoin's transparency and capital flows.
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