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Cryptocurrency and stablecoin Tether drops below one dollar

The instability of the cryptocurrency market is currently undeniable. The famous bitcoin (BTC), despite its power, has experienced a dizzying decline. But a lot of stablecoins like Tether (USDT) do not come out unscathed either. How far will this collapse of the cryptocurrency market and this chaos which reigns at the level of the stablecoin ?

Tether stablecoin price slides below dollar parity amid ongoing woes

the stablecoin Tether is constantly falling

Considered the greatest stablecoin, Tether (USDT) is, however, going through a difficult period. This Thursday, its price dropped below $0.96. This is a drop that further demonstrates the crisis suffered by the cryptocurrency market. Recently, the digital asset world witnessed a noisy bitcoin crash, and now it’s the stablecoin Tether which is experiencing a remarkable drop. A few days ago now, the stablecoin algorithmic TerraUSD (UST) has also destabilized. TerraUSD should normally follow the course of the US dollar.

For Tether, the situation is not about to get better, because in just 24 hours, the token has slipped to $0.95 on FTX. On Bitfnex, a subsidiary of Tether, USDT is currently trading at $0.99. Many are the probable causes of such a fall as well as that of the other stablecoins. What is certain is that the collapse of UST and LUNA, the native asset of Terra, has had a lot to do with the upheaval of the cryptocurrency market.

Tether continues processing redemptions

Because the situation is alarming and the panic in the market is very present, Tether is honoring the commitments to its customers. Thus, the processing of redemptions continues normally. Moreover, the refusal of redemptions was never among the practices of Tether.

Despite this drop, Tether has already processed USD 300 million in redemptions within 24 hours. The processing continues and he is currently handling another 1 billion redemptions. The operation goes smoothly.

Faced with this crash, market makers are doing things differently to take advantage of the situation. They buy USDT on Kraken at a low price to resell on Bitfinex. If they are there, it is because the price of stablecoin Tether is significantly lower on Kraken. While on Bitfinex, the price is below the dollar. As for other users, they buy USDT for less than a dollar on Kraken and do a direct refund for $1. Whatever the process, the goal is always profit, because the arbitrators can run after some profits.

Conclusion

Tether is losing its peg against the dollar, sure. But this collapse is not just about this great stablecoin. The fall is a phenomenon that affects the entire cryptocurrency market. Only, for Tether, the reality is like this: its price falls below the parity of the dollar. However, today this fall does not slow down the processing of redemptions.

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Source: Cointribune

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