USDT makes bear market comeback with total supply nearing all-time high

It's been a sleepy period for the crypto market, but one player is doing just about as well as it did during the go-go days of the most recent bull cycle. 

Stablecoin issuer Tether saw supply of its flagship dollar-pegged coin reach $83.5 billion on Monday, according to data from The Block. That's just below the record high of $84.1 billion reached on May 10, 2022.  

Tether's comeback has occurred against the back drop of a somnolent market that's under pressure from macro headwinds and regulatory uncertainty in the U.S. Amid declining trading activity and lower crypto prices, the supply of rival USDC has declined from nearly $47 billion to $27.8 billion. 

As for what's behind USDT's rise? According to data provider Kaiko, it doesn't appear to be tied to an increase in trading volumes. 

"The data doesn’t show any notable increase in USDT market share (as measured by trade volume) relative to other stablecoins over the past few months, in large part due to Binance’s promotion of TUSD as an alternative to BUSD," the firm said. 

The firm added that the increase in USDT supply could be tied to offshore trading among market making firms and whales. 

Here's Kaiko:

"Why are so many USDT issued on Tron when the network has minimal DeFi activity and several major exchanges such as Coinbase do not support it? Offshore exchanges like Binance and OKX possess the largest USDT balances on Tron, which suggests market makers and whales prefer this network for its low transaction fees."