Tether Prints $250m USDT, Charlie Lee (Litecoin) Believes Prices Are “Going Up”

There’s good news for the struggling cryptocurrency industry today as Litecoin’s Charlie Lee tweeted a statement claiming prices could be “going up”. Lee was citing a tweet from FOMO Bot alerting that $250 million worth of USDT had just been printed by Tether.

Generally, this has been a precursor of price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn't mean they will buy right away. DYOR https://t.co/zg2PEjGohv — Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018

“Generally, this has been a precursor of price going up,” explained Lee in his tweet. “Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto.”

Charlie Lee, the former Google employee who created Litecoin (LTC), may have spurred the markets with his tweet. As of mid-day Monday, prices are up across the cryptocurrency industry. Bitcoin has risen 4.80% to a price of around $6,300, for example. EOS is leading the market today with a gain of 10.18% after being picked as the world’s best cryptocurrency by the government of China. Monero has also gained a surprising 12% over the last 24 hours.

Tether, for those out of the loop, is the world’s most widely-used stablecoin. Used by a number of the world’s largest exchanges, Tether gives investors an easy way to hedge their bets or realize their gains. Tether is best-known for its USDT token, a digital token that represents a 1:1 ratio with the USD. Tether has faced criticism for avoiding an audit of its USD reserves, although it’s still used by major exchanges like Bitfinex.

On Monday morning, it was discovered that Tether had printed 250,000,000 new USDT tokens.

As explained by Charlie Lee in his tweet,

“This is similar to someone depositing $250MM to exchanges.”

Lee cautioned, however, that this doesn’t necessarily mean that they will buy right away. Some users will wait to purchase cryptocurrency with their deposited funds. He recommended that users do their own research into the issue.

Right now, however, Lee’s prediction seems to be true, as cryptocurrency prices are surging across the board.

It’s not guaranteed for prices to rise after Tether prints new USDT. In fact, the last time Tether printed a lot of tokens, the price of bitcoin actually dropped. On March 20, Tether printed 300,000,000 USDT tokens. The price of bitcoin dropped from $9,000 to $6,400 in the coming weeks, bottoming out on April 1.

Lee actually addressed this issue in his Twitter thread, saying:

That's why I said generally. It's not always the case. But if it dumps it's not because of this newly printed USDT. — Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018

Charlie Lee followed up a lot of questions and concerns from fellow crypto enthusiasts:

You don't understand how USDT works. It's by definition always on the sidelines. Someone has to hold it and it represents USD 1:1. — Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018

If there's always more people getting in than leaving, then they will only print more USDT and not need to destroy any. Doesn't mean that no one exchanges their USDT for USD. — Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018

Yes you can, but I think it's much easier and safer to short the futures as oppose to buy USDT to short. Not sure though. — Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018

No, when someone sells BTC for USDT, there is a buyer that bought BTC with USDT. No USDT gets printed in that case. — Charlie Lee [LTC⚡] (@SatoshiLite) June 25, 2018

The only thing we can do is wait and see. Will cryptocurrency prices continue to rise? Or will we see a pullback after a short-term gain?