Tether Limited, the official supplier of the dollar-based digital currency tether (USDT), has yanked almost a quarter of the contentious cryptocurrency’s market capitalization out of circulation since the start of this month.

Details of the Transactions

On 18th October 2018, crypto exchange Bitfinex sent another 50 million USDT to the Tether Treasury. This was the sixth moment this month that the firm, which shares a management board with Tether, yanked USDT out of supply by keeping them in the treasury address. So far, Tether has not supplied any extra tokens this month, and the last time extra tokens were supplied was on 21st September, when the Treasury released 50 million USDT to Bitfinex.

With the September 21 transaction, tether’s supply market capitalization reached $2.8 billion, the best hit ever.

However, Tether’s present market capitalization is slightly less than $2.16 billion. This is because the coin has constantly transacted below its alleged $1.00 price point since October 15.

Remarkably, much of the outflows took place either after or directly before USDT lost its USD peg, sinking the token’s average price to as low as $0.92. Transactions that were done on 3rd October and 9th October pulled a sum of $110 million from the flow, but the other $500 million was pulled from the Tether market within three days, from 14th October to 17th October.

The Explanation for the Rapid Rise in Tether Outflows

There are numerous likely clarifications for the rapid rise in outflows. The first and best explanation is large-scale USDT investors have started swapping their investments out for the recently released “regulated” stable cryptocurrencies from Paxos, Gemini, and Circle.

This would have been mostly appealing in the past few weeks as Paxos, Gemini, and Circle were highly valued to the USDT and the physical greenback. Nevertheless, all these coins have encountered a rapid market capitalization hence their current prices could just account for a percentage of tether’s outflows.