The total supply of the largest stablecoin in the cryptocurrency market, Tether (USDT), continues to decline as investors are said to be massively withdrawing.
Tether (USDT) drops 1.6 billion USD
The cryptocurrency market has just experienced a series of “sell-off” days that began on June 10, with the prices of many major coins such as BTC and ETH hitting their lowest bottoms since December 2020 – January/January 1, respectively. 2021. Total market capitalization collapsed to $829 billion – the lowest level since January 2021.
Even stablecoins are not safe from the force of the market. The largest stablecoin in the market, Tether (USDT), on June 15, was sometimes depeg (losing the $1 mark), down to $0.9983.
The reason for this drop comes from false rumors in the market, that the issuer of USDT, Tether, has a partnership with Celsius, the lending project is on the verge of bankruptcy. Also, an old fud of Tether’s lack of collateral for USDT has been revived, given that much of the company’s assets have been moved into riskier forms such as corporate paper.
The overwhelming negative news caused Tether’s capitalization to drop from $72.4 billion on June 12 to $70.8 billion on the morning of June 16., most likely because investors converted from USDT back to USD.
Tether later denied these FUDs.
In mid-May, when the crash of LUNA-UST took place, USDT was also depeg to $0.97. Tether’s capitalization then also dropped from $82 billion to $72 billion as users rushed to withdraw.
This information has been confirmed by Tether and confirmed that they are still “overwhelming” to return $ 10 billion to investors in just 72 hours, which is the clearest proof for the health of the company, smashing the news. Unfounded rumors that Tether does not have enough collateral.
However, compared to the other two major stablecoins on the market, USD Coin (USDC) and Binance USD (BUSD), Tether’s margin risk is still higher.
Specifically, USDT’s collateral assets as of the end of March 2022 include cash ($4.1 billion), US Treasury bonds ($39.1 billion), commercial paper ($20 billion), and other assets. other accounts (18.6 billion USD). Meanwhile, USDC is backed by $11.6 billion in cash and $39 billion in US Treasury bonds; and BUSD is 100% backed by 17.4 billion USD in cash as of the end of March 2022.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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