According to data monitored by Whale Alert, Tether has minted 1 billion USDT on the Tron network this week and transferred it to an unknown wallet address. On-chain analysis firm Lookonchain has also confirmed this issuance, noting that the company has cumulatively minted over 20 billion US dollars in stablecoins since the major crash on October 11.

Stablecoins represented by Tether's USDT and Circle's USDC are the most critical tools for entering and exiting the crypto market, and changes in their issuance are often seen as indicators of capital flow and market sentiment.

A decrease in stablecoin market capitalization: indicates capital outflow, as investors redeem stablecoins and return to the traditional dollar system.

An increase in stablecoin market capitalization: signifies that new dollar funds are flowing into the crypto market, preparing investors to allocate crypto assets.

In theory, Tether and Circle can only issue stablecoins based on real dollar deposits. Therefore, the continued issuance shortly after the liquidation wave shows that not only has capital not left the market, but new funds are entering the crypto market at the current price levels.

Generally, such issuance may drive short- to medium-term price fluctuations in the overall crypto market. When a large amount of stablecoins is exchanged for mainstream coins like Bitcoin and Ethereum, it may push the prices of these assets upward; however, if the issuance is primarily for speculation, the market will become more reliant on liquidity rather than fundamentals.

However, large-scale issuance also brings potential risks. Stablecoins essentially rely on the issuing institution's commitment to reserve assets (such as fiat currency, cash, or government bonds). If the reserves are opaque or poorly managed, a loss of market confidence could lead to a panic redemption, causing the peg to fail.

Historical data shows that multiple large issuances often occur during market correction periods, typically followed by price increases:

December 6, 2024: Tether issued 2 billion USDT, and Bitcoin rose about 8% in the following 10 days, from $99,000 to $107,000.

September 4, 2025: Issued 2 billion USDT, and 30 days later, Bitcoin reached an all-time high, rising from $110,500 to $124,500.

These issuance events occurred during relatively unstable market phases but often became precursors to subsequent price rebounds. If historical patterns repeat, Bitcoin may be forming a phase bottom within the current range of $85,000 to $90,000. Additionally, as recent media reports have pointed out, mainstream on-chain indicators show that crypto whales are generally leaning towards bullish positions and actively accumulating at lower levels.

However, with the rapid growth of USDT supply in the market, regulators and rating agencies are increasingly concerned about the risks associated with the companies behind stablecoins. Recently, S&P downgraded Tether's rating from 4 (restricted) to 5 (weak) after considering asset quality, governance mechanisms, and other dimensions, marking the lowest score in their rating system.

In response, Tether expressed strong opposition, stating that S&P's report contained "bias" in its description and pointed out that the rating methodology failed to reflect the nature, scale, and macroeconomic importance of digital currencies, while also neglecting data that could demonstrate USDT's stability, transparency, and global usage value.

S&P noted that over the past year, the proportion of high-risk assets in Tether's reserves has increased, including Bitcoin, gold, secured loans, corporate bonds, and other investments, which have limited information disclosure and carry credit, market, interest rate, and exchange rate risks. The report also pointed out that Tether's disclosure of the credit status of custodians, counterparties, or bank account providers remains limited. However, S&P also acknowledged that Tether has maintained significant price stability even during periods of volatility in the crypto market.

In fact, S&P's low rating of Tether as a crypto industry company is not an isolated case. Recently, S&P also assigned a B- issuer credit rating to Strategy. As one of the top three rating agencies alongside Moody's and Fitch, their rating results still hold considerable authority in today's financial markets.

Specifically, S&P's analytical approach mainly includes the following steps:

Asset quality risk assessment: First, assess the credit risk, market value volatility, and custody risk of each stablecoin.

Analysis of over-collateralization and liquidation mechanisms: Further examine the extent to which the over-collateralization requirements and liquidation mechanisms of each stablecoin can mitigate the aforementioned risks.

Asset quality scoring: Based on the above factors, S&P assigns an asset quality score of 1 to 5 to each stablecoin, corresponding to "extremely strong, strong, adequate, restricted, weak."

Additional dimension assessment: After completing the asset quality analysis, an evaluation will also be conducted from five dimensions: governance mechanisms, legal and regulatory frameworks, redemption capacity and liquidity, technology and third-party dependencies, and historical records.

Overall risk view and final score: The strengths and weaknesses of these five dimensions will be summarized to form an overall risk view, ultimately affecting the comprehensive score and credit evaluation of the stablecoin.

However, S&P's rating system is derived from traditional finance, designed over many years for mature markets such as banking, corporate debt, and insurance, emphasizing factors such as asset quality, cash flow, leverage levels, governance mechanisms, and legal regulatory frameworks. This method is effective in traditional finance but may encounter some "generational differences" when applied to crypto companies and stablecoins.

First, crypto assets are inherently high-volatility, highly liquid, and distributed-managed digital assets, while traditional rating systems focus on long-term, predictable, and auditable financial metrics. Second, governance mechanisms and legal regulatory frameworks are very clear in traditional finance, whereas the operational models of crypto companies are diverse, with features such as cross-border transactions, decentralized governance, and smart contract custody, making it difficult for traditional metrics to comprehensively cover potential risks.

The issuance of stablecoins not only reflects market capital flows and investor sentiment but may also drive short- to medium-term price fluctuations in mainstream coins like Bitcoin. However, this issuance behavior also hides potential risks: the transparency of reserve assets, custody, and management levels remain key factors for market confidence.

At the same time, S&P's low ratings of Tether and companies like Strategy highlight the tension between traditional financial rating systems and the generational differences of digital assets. Although ratings provide a reference for risk, the high volatility, decentralized governance, and cross-border operational models of the crypto market mean that investors still need to make independent judgments based on on-chain data and market dynamics.

Related: The Federal Reserve injected $13.5 billion overnight, Bitcoin (BTC) faces resistance at the $50,000 mark.

Original article: “Issuing 1 billion USDT, Tether is rated the lowest by S&P, how should the market interpret this?”

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