Holy Shit, are they just trying to print out tethers out of thin air right now to pump Bitcoin? And it seems to be working, at least for now. This can't end up well.
That's the line I often see on Twitter / Reddit and usually gets a lot of upvotes, despite being irrational, with no proof to back it up.
As bitcoin falls, the demand for Tethers goes up. To keep Tethers pegged to, say, $1 USD, they need issue more to meet the demand, which would be a more rational explanation why more were issued.
Or maybe people want USD, but the exchange forces them to go through Tether to get there. So there'll be a brief demand for Tethers, then a big selloff of Tether for USD.
Tether was kicked out of their HK and Taiwan banks, and now they are banking in Caribbean islands. They are supposedly holding $1.55 Billion USD cash in one of those banks to back USDT issued so far.
My question is, have you seen a Caribbean bank? Most bank HQs over there look like a 7-Eleven, and banks are owned by local politicians or shady characters. Anyone who deposits more than $1 million in those banks is a fool.