Remember, Tether's customers are the exchanges, not random end users. New Tether mints go directly to the exchanges, presumably in exchange for short term loan

Remember, Tether's customers are the exchanges, not random end users. New Tether mints go directly to the exchanges, presumably in exchange for short term loan agreements (Tether themselves doesnt claim to have more than a few percent backing in cash, its mostly unspecified "commercial paper"). The exchanges can now use this new found liquidity to trade themselves, run promotions, etc.