Tether, the issuer of stablecoins, recently minted $1 billion worth of USDT tokens on the Ethereum blockchain, taking advantage of market optimism that the US Securities and Exchange Commission (SEC) might soon approve a spot ETH ETF for trading.

Whale Alert first noted the minting, which was later confirmed by Tether CEO Paolo Ardoino. He explained that this was an "inventory replenish" transaction, meaning the tokens are authorized but not yet issued and will be used for future issuance requests and chain swaps.

Market analysts believe this move is strategic, anticipating a potential market rally from the ETH ETF approval. Ivan Sherbakov, CEO of Cryptorobotics, suggested the minting will provide liquidity to boost the market ahead of the ETF news.

This view is supported by data showing a link between increased USDT supply and broader market growth, resulting in higher trading volumes and a more dynamic crypto environment.

Typically, Tether replenishes its inventory by creating new USDT tokens in expectation of increased customer demand. These tokens are held in Tether’s treasury and are classified as "authorized but not issued," meaning they are not yet part of the circulating supply or market cap.

As of May 21, Tether's Transparency page showed $87.8 million worth of such USDT on Ethereum. Over the past year, Tether’s market cap has grown significantly to over $110 billion, accounting for about 70% of the market, according to CryptoSlate. This growth is attributed to factors like the successful launch of spot Bitcoin ETFs in the US and Tether's expansion into other sectors, including Bitcoin mining.