For some reason, the wider blockchain space (most notably, its 'flagship' publications) have been championing the idea that Tether's meteoric, unrestrained and engimatic growth is somehow a good thing for the blockchain space.
The purpose of this report is to put the "growth" into perspective and assess why there is nothing 'bullish' about the over production of Tethers.
We're also going to look at potential reasons for why USDT is being produced at such quantities.
Tether's Performance Over the Past Month
One eye popping fact for Tether:
From May 14th to April 15th, the total number of outstanding Tethers increased from 6.3 billion to 9.2 billion outstanding tokens.
Yes, that's just a little ove a month in which 3 billion Tether tokens were minted.
Putting This in a Logical Perspective
Since the space is still operating as though USDT is legitimate (by virtue of USDT being traded at parity at 1 USD per USDT).
By virtue of what Tether (and its representatives) have released publicly, Tether tokens are only minted in response to actual demand (as in purchase orders / requests / etc.).
We Must Also Accept That Tether Minting 2.5 Billion Tokens in One Day Was Legitimate as Well
Yes, you read that title correctly.
During one 24-48 hour period in April, Tether minted over 2 billion USDT tokens.
On May 13th, 2020 - there were 6.3 billion outstanding tokens.
As we can see, just a day later on May 14th, 2020 - we see the total rose to 8.5 billion outstanding Tether tokens.
Asking Some Hard Questions
What logic is there to justify the minting of 2.5 billion tokens in a 24-48 hour period? Keep in mind that Tether's volume (individually) has exceeded that of Bitcoin and Ethereum (combined, on many occasions).
Why are there market-based reports in the blockchain space lauding this recent disbursement of Tether / USDT?
What happens in the (inevitable) case that even more operators of USDT find themselves under criminal indictment in some jurisdiction? (Notably, the United States has the potential to leverage the 'Patriot Act' in order to apprehend those that are still perpetrating the fraud that is Tether at large).
Taking a Look at a Few Additional Concerning Metrics Related to Tether
As we can see below, Tether's 24-hour market volume (over the previous 24 hours from the time of writing on June 14th, 2020) stands at $21 billion in traded volume.
Notably, this exceeds the volume of every other cryptocurrency available, including blockchain.
Numbers Simply Don't Add Up
There are some noteworthy facts surrounding Tether's circulating supply that defy the idea that there could be 9 billion tokens in circulation (at the time of writing).
In particular, there are exponentially more USDT tokens in circulation than actual USD (the currency that USDT claims to be contingent upon).
Data By CryptoCompare Corroborates This Claim
As we can see below, during the same period of time where we tracked Tether's circulating supply increase by over 3 billion tokens (an increase of >50%), USDT's total trade volume (among all exchanges and markets in the blockchain space), exceeded that of USD by a factor of 20.
The chart above (provided by CryptoCompare), shows that on April 10th, there was:
A) $413 million in total traded volume for USDT
B) Just $24 million in total traded volume in actual USD traded volume
Coupling These Numbers With a General Lack of Demand in the Crypto Markets
If we look at the gif provided below, which detail the overall volume during the time period in which Tether's circulating supply increased by over 3 billion USDT tokens, we can see that there was hardly any additiona linterest that was generated in the blockchain space over that span of time.
Below is a look at the total aggregate data via all trading during the month of April :
As we can see from the gif above (courtesy of Librehash) it appeas that the volume remains stagnant throughout the entire month with one brief spike.
However, nothing that's in the ball park (or realm) of justifying the exorbitant increase in Tether's supply.
Even Tether's Volume Deceased During This Time Period
Believe it or not, Tether's actual traded volume decreased while they were busy minting 2.5 billion additional tokens in one 24-48 hour block of time.
Don't believe it?
See for yourself below:
This is far from the 'conclusion' of our coverage on the matter.
There are plent of additional really disturbing facts about Tether that should put even the most ardent blockchain supporter on edge.
It seems clear that after minting 2.5 billion tokens in just 24-48 hours a couple of months ago, Tether has shown that they have no willingness to compromise with the realm of logic, despite already being given an undeserved seal of approval and benefit of the doubt in lieu of the fact that multiple high-ranking members within their syndicate have already been indicated and/or imprisoned across the world (i.e., Ivan Manuel Molina Lee, Oz + Ravid Yosef, Reginald Fowler, and others).
We'll get more into those names in due time.
For now, this is Librehash signing off urging a serious word of caution.