On 10/2/2026, Tether Treasury burned (permanently destroyed) 3.5 billion USDT on the Ethereum network – one of the largest burns in stablecoin history!
According to Whale Alert and confirmation from CEO Paolo Ardoino:
🔸 The burn transaction was carried out directly from the official treasury address.
🔸 No signs of chainswap or chain transfers related (like previous times with HTX recovery on Tron/Eth).
🔸 No new minting compensating on other chains (in contrast to some recent burns with minting on Tron).
Why such a large burn?
Typically, Tether's mint/burn relates to actual demand: Mint when users deposit fiat to get USDT, burn when redeeming (withdrawing fiat).
This time there is no clear redeem/chainswap activity → High likelihood Tether is reducing excess USDT due to low usage demand during the strong market correction.
Large/institutional investors may be redeeming USDT for fiat (withdrawing funds from crypto).
Decrease in USDT supply → It may help stabilize the 1:1 peg, but it also reflects the outflow of cash from the crypto ecosystem in the short term.
Market impact:
🔸 Short term: Decreasing USDT supply may create liquidity pressure (less USDT to trade), contributing to the recent BTC/ETH dip.
🔸 Long term: Significant burn is often a signal to “reset” supply, helping Tether maintain trust (reserves matching circulating supply). If demand returns, they will mint new.
🔸 This is the second consecutive large burn (after 3 billion USDT last month) → USDT market cap has experienced negative growth for the first time in 2 years!
What do you think? Is this a sign of large withdrawals from institutional investors? Or just a normal adjustment of Tether?
#Tether #USDT #stablecoin #CryptoNews #BinanceSquare
