The stability of Tether USDT has been tested against the backdrop of a crypto market shake-up
Date: 2023-08-18 Author: Karina Ziganova Categories: CRYPTO PAYMENTS, IN WORLD
The value of Tether USDT stablecoin fell from its $1 peg amid a market carnage that wiped out nearly $17 billion from the cryptocurrency market on August 100.
Typically, crypto traders turn to stablecoins as a hedge against the industry's inherent market volatility. These assets are designed to maintain their pegged value at all times, regardless of prevailing market conditions.
However, USDT has failed over the last 24 hours as its value fluctuated from $0.99847 during the August 17 carnage to $1.0007 in the early hours of today, according to Tradingview data.
Tether USDT Price
USDT has rebounded, but has yet to fully recover its $1 peg at press time. At the time of writing, the stablecoin is trading at $0.99951.
USDT Tether is the largest stablecoin by market capitalization, controlling over 60% of the entire market. According to the quarterly attestation, the stablecoin issuer has an excess reserve of up to $3.3 billion.
However, a look at the dashboard of 3Pool—the largest liquidity pool on Curve—shows that crypto investors favored competing USDT stablecoin options during the market situation. According to the dashboard, USDT accounts for almost 50% of the reserve, while USD Coin (USDC) and DAI account for 50% of the balance.
This means traders were likely selling USDT for DAI and USDC as the pool is expected to hold an equal amount of 33.33% of each of the three stablecoins.
Tether Depeg
In addition, Tether's market capitalization has declined slightly from a peak of $83.08 billion to a current balance of $82.8 billion. This once again indicates how the market situation has affected USDT as traders have sought refuge in other assets.
Despite these issues, USDT has become the most traded stablecoin in the last 24 hours, with trading volume exceeding $50 billion. This figure is six times higher than its competitor, USDC, recorded over the same period.
