Tether might be in danger as Celsius is crashing. Because Tether is the lead investor in Celsius.
Tether is one of the pillars with USDT stablecoin. It was showing signs of depegging from dollar amid the Terra and Luna crash. But everything went fine.
Some analysts predicted USDT crash would have killed the crypto market. USDT is cryptocurrency #3 and is some kind of the default payment method in the crypto world.
But Tether survived May with no substantial losses.
It’s June now and we are on the verge of another crypto crash.
Celsius is going down, threatening to exacerbate the ongoing crisis.
And some people think it might be the hit that Tether will not be able to withstand.
What does Tether have to do with Celsius
Twitter went mad on Celsius this Monday morning. And some users immediately brought up Tether. And it was like a spark igniting the pile of wood.
One user wrote:
“For those that don’t know, #Tether is the lead investor in #Celsius and its biggest lender. Imagine what will happen when…”
Other followed with similar tweets.
Basically they pointed out that Tether might have a vulnerability. Some of the reserves that are supposed to support USDT peg to dollar are allegedly tied with Celcius.
So if Celsius falls – which is likely to be happening right now – so will Tether and USDT.
Is it actually true?
Yes. And no.
Seems like Tether has been investring in Celsius indeed. This investment accounts for $160 million now.
This a huge amount of money to lose.
At the same time Tether was somehow able to let users withdraw around $7 billion during the Terra’s UST crash.
The peg to dollar was never actually lost for USDT. For a while you could be losing a few cents for every dollar. But overall stability was secured.
As one og the Twitter users noted:
“Things don’t look very good for Celsius, but I doubt that it will take an effect on Tether.”
We’ll have to wait and see.