While Bitcoin (BTC) keeps falling, and Terra (UST) is becoming the legendary looser of the crypto market, other famous stablecoin – Tether (USDT) – is still holding on rather well as the crypto crash unveils. Or is it?
Bitcoin has already dropped below $27K, right to December 2020 lows. Many altcoins follow the crypto crash lead, having fallen drastically.
But what about stablecoins? They are, well, called stablecoins for a reason, right? Because, they stable. Or at least supposed to be stable. Stablecoins are pegged to real world assets like US Dollar or gold (yes, there are gold stablecoins).
It seems that in times of crises and uncertainty the highly volatile cryptos like Bitcoin and altcoins are to be outshadowed by stablecoins. Because, again, they are stable and can – at least in theory – preserve your wealth even when the market is in dismay.
Well, everything is much more complicated. One of the most popular stablecoins – Terra (UST) – has crashed like there is no tomorrow. And the most widely used stablecoin – Tether (USDT) – is showing some negative trends. Yesterday USDT peg to US Dollar slipped under 99 cents.
What is going on with USDT during the crypto crash?
USDT is pegged to US dollar. And if you are using USDT often you might have noticed its price slipping from time to time. Just briefly and not substantially. But yesterday people who own, say, $1,000 USDT could see it cost something like $990. Or even a bit lower for a while.
Actually, it led to a new conspiracy theory on Twitter stating somebody has launched a coordinated attack at all stablecoins. According to this theory what Terra’s UST was just a beginning. And USDT might be the next victim.
Well, at the time of writing, there is no evidence to this theory whatsoever.
Instead, Tether officials claim to have everything under their control. And USDT is able to withstand the global crypto crash.
For example, Paolo Ardoino, Tether’s CTO, took to Twitter to clearly state that there is nothing terrible going on.
“Reminder that tether is honouring USDt redemptions at 1$ via http://tether.to .
>300M redeemed in last 24h without a sweat drop.”
Basically, it means that anybody can withdraw his or her USDT with a rather fair price of 1 USDT for 1 US Dollar. Which is what stablecoins are there for, in the first place. A nice scenario for USDT to survive crypto crash and anything else that might be coming.
There were some rather harsh comments to Ardoino’s tweet. Some people were saying that by doing so Tether is promptly funding a big arb support. “How long can it last?”, one of the users asked.
Ardoino has not yet responded to this comment.
As well as to another comment that shows quite vividly how much some people care about stablecoins such as USDT. One user wrote: “Please do whatever you can to maintain the peg no matter how illegal it may be.” Investors definitely want USDT to survive the crypto crash.
Crypto exchanges still keep USDT price lower than 1 US Dollar. For example, 1 USDT is worth $0.99 now on Binance.
Source: Paolo Ardoino via Twitter