Tether’s $8B USDT Increase Sparks Crypto Liquidity Surge After Fed Rate Reduction

Tether Holdings Limited set a new record by creating $8 billion worth of

in July 2025, making it the largest monthly issuance in the stablecoin’s history. This significant increase was driven by heightened institutional interest and greater liquidity needs, with crediting the growth to the token’s expanding global use. The minting supports recent statements from Tether CEO Paolo Ardoino, who noted rising confidence in the stablecoin. USDT now represents almost 59% of the $292.6 billion stablecoin sector, with a circulating supply of $172 billion. In the last 90 days, 3.5 million new wallets holding at least $1 in USDT were created, nearly tripling the growth rate of competing stablecoins.

This rapid growth has shifted how USDT is distributed across blockchains.

now holds $81 billion in USDT, overtaking Tron’s $78.6 billion for the first time since 2023. This change points to renewed demand for Ethereum-based liquidity, fueled by institutional participation and broader economic trends. Smaller amounts of USDT continue to be held on Binance’s Chain and . Tether’s growing dominance has sparked speculation about its influence on the wider crypto market, especially since increases in USDT supply have historically coincided with higher trading volumes in and Ethereum.

The latest round of minting happened alongside the Federal Reserve’s initial interest rate cut of 2025, which lowered borrowing costs and hinted at a more relaxed monetary policy. Analysts believe that reduced rates could boost risk assets like cryptocurrencies by making capital cheaper. Tether’s $5 billion issuance within a week of the rate cut highlights how investors are positioning themselves for changing economic conditions. Blockchain analytics platforms observed substantial wallet activity, with exchanges such as Binance seeing large USDT deposits. This influx of liquidity has been associated with increased trading on both decentralized and centralized platforms.

Tether’s rapid growth has reignited discussions about transparency and market stability. Some critics warn that such large-scale minting could encourage speculation and manipulation, especially in an industry with limited regulatory controls. Data from DeFiLlama and Onchain Lens indicate that Tether’s swift issuance has boosted liquidity in major DeFi protocols, causing lending rates on platforms like

and to fall as new USDT entered the market. Arbitrage opportunities across decentralized exchanges have also grown, highlighting USDT’s role as a key source of liquidity.

The broader impact on the crypto market remains a central topic. Experts note that Tether’s leading position among stablecoins makes it a major force in shaping market trends. The July minting, together with the post-Fed expansion, is seen as a sign of expected demand for crypto assets, especially as traditional liquidity becomes more accessible. While some analysts warn against relying too heavily on USDT for market stability, others believe the stablecoin’s growth strengthens its function as a bridge for both institutional and retail investors entering digital assets.

Tether’s recent actions have also brought attention to the competition among stablecoins. Its ability to surpass rivals like

and in terms of user growth and supply has raised questions about how long it can maintain its lead. However, Tether’s open reserve reports, which show $127 billion in U.S. Treasury holdings and $20 billion in new USDT issued in the second quarter of 2025, have increased investor trust. As the stablecoin market continues to develop, Tether’s ongoing expansion is likely to influence both regulatory approaches and market reactions, especially as central banks and regulators pay closer attention to digital assets’ roles in the global financial system.

Source: [5] Tether’s USDT Recent Mintings on Ethereum (Onchain Lens) [6] Tether’s USDT Supply (DeFiLlama) [7] Tether CEO Paolo Ardoino’s Statements (X)