Tether (USDT) has been affected by a recent depeg that resulted in the price of the largest stablecoin falling by 0.4% from $1 to $0.996. Due to the large impact that a depeg could have on the market, the crypto community became worried about what could happen with Tether in the near future. But what did really happen with Tether FUD in recent days?
Tether FUD and Depeg Explained
Everything started with the decision of a “whale” to open a new address and deposit 52.2 million worth of USDC to take a loan of 40 million USDT. To do that, he relied on two popular decentralized protocols Aave and Compound.
These funds were then deposited in two crypto exchanges: Coinbase and Kraken. Blockchain analytics firms found these two large deposits and the community worried there could be a dump of USDT in the market.
After this, several short positions were opened against USDT. Furthermore, Curve’s stablecoin pool (DAI, USDT, USDC) saw the number of USDT reaching close to 70% of the whole value of the pool.
This situation has created great fear in the market. Let’s not forget that Tether is the largest stablecoin with a market capitalization of $83 billion. USDC, the second largest stablecoin has just a market valuation of $28 billion.
About it, Tether wrote on Twitter:
“Tether raises the bar of transparency in the industry, dropping its opposition in the FOIL matter. In moments of global financial uncertainty, like the current one, we believe it’s important to give a strong signal to our community. Prioritizing openness, stability and liquidity is at the core of Tether. Thank you everyone for your support in our journey.”
Tether raises the bar of transparency in the industry, dropping its opposition in the FOIL matter. In moments of global financial uncertainty, like the current one, we believe it’s important to give a strong signal to our community. Prioritizing openness, stability and liquidity… pic.twitter.com/bQtdGkSuS4
— Tether (@Tether_to) June 15, 2023
At the moment, Tether is trading back almost at par with the USD dollar as per CoinGecko ($0.999255).
Via: 2Usethebitcoin.com
