Earlier Thursday, the Tether (USDT) stablecoin, which has a huge presence in the crypto market, also fell below $0.96, indicating that market pressure is gradually being transmitted from UST to more dollar-pegged currencies.
The report said: As of 3:15 a.m. ET, the token’s quotation on FTX had fallen to its lowest point in the past 24 hours, at $0.956. At the same time, Bitfinex, which is owned by Tether’s parent company, also traded at $0.998 in USDT.
The algorithmic stablecoin TerraUSD (UST) began de-pegging from the U.S. dollar over the weekend, with cryptocurrency giant BTC leading the plunge.
While it’s unclear what exactly is the biggest factor behind the panic in the stablecoin market, the broader stablecoin market has been volatile in recent days following the collapse of the LUNA cryptocurrency, which is backed by UST/Terra.
Referring to data from TradingView, BTC is currently trading at around $25,800 on Coinbase. However, as of The Block press time, USDT is still the most stable currency in the circle – Binance USD and USD Coin are 1.08 / 1.09 US dollars respectively.
Unlike UST, Tether (USDT) is backed by a portfolio of assets so that investors can redeem a stablecoin at any time for $1.
Over the past few days, Tether CTO Paolo Ardoino has been calling for investor confidence on Twitter, emphasizing that more than $300 million has been redeemed “without effort” in the past 24 hours. When the media wanted to comment further, he said in a statement on Thursday: The market experienced an expected panic yesterday, but the redemption process for Tether is as usual. During this period, no redemption from any verified customer has been rejected, and this has always been our code of conduct. In the past 24 hours alone, Tether has cashed out over $300 million in redemption transactions. And so far, another $1 billion is in the process of being methodically processed. Paolo Ardoino added: On Bitfinex, the Tether stablecoin is still pegged to the U.S. dollar and > $1, only slightly less than $1 on Kraken.
At the same time, market makers and arbitrageurs who are looking for opportunities are trying to make profits by buying low and selling high between different platforms.
