The minting of USDT, the world's largest stablecoin by market capitalization, has dramatically declined on Ethereum and Tron networks. Over the past six months, issuance has fallen from $7 billion to just $1 billion. Sound like a catastrophy, yet it isn't.
This sharp decrease coincides with a broader market contraction in June. It indicates reduced trading activity and waning demand for cryptocurrencies during this period. The question is, however, how serious this might be in a long-term perspective.
An analyst on X highlighted this trend. And came up with a possible explanation, saying that the decline in minting activity reflects diminished blockchain utilization on both networks.
Tron remains a preferred network for USDT minting despite Ethereum's dominance. It offers superior scalability and lower transaction costs.
Ethereum has made strides in scaling. The emergence of layer-2 platforms like Base and Arbitrum has bolstered its ecosystem. Recent upgrades, such as Dencun, aim to reduce transaction costs on these layer-2 solutions.
The drop in USDT minting suggests a broader decline in crypto demand. Historically, large-scale USDT minting has correlated with rising Bitcoin and crypto prices.
Until minting activity resumes on these leading smart contract platforms, Bitcoin and major altcoin prices may remain suppressed.
Tether, USDT's issuer, recently partnered with Uquid. The collaboration aims to modernize payments for the Philippines' Social Security System using the TON blockchain.
Simultaneously, Tether announced the cessation of USDT minting on Algorand and EOS networks. Redemptions will continue for another year.
USDT can still be minted on over ten platforms. The total USDT minted to date exceeds whopping $110 billion. Who says cryptocurrency isn't conquering the world right now?