What's going on with #Tether right now, and why are people so worried about the largest #stablecoin in crypto? And what happened with its temporary depeg below its normal $1 designed price level?
This isn't the first time Tether has fallen slightly below its price it's relied upon to always rest at. In fact, with a dip to $0.996, most have shrugged this off as just a slight blip that we typically have seen a few times a year since the stablecoin's introduction in 2017. There was a much more concerning drop down to $0.983 in October, 2022.
But regardless, what exactly is happening? Multiple reports came out stating that #Coindesk was provided documents related to Tether's reserves ( #USDT ) after the team at Tether provided financials ordered by the court. Coindesk received the data from the New York Attorney General.
According to the Santiment AI chatbot, available to try on the Santiment Discord server, most social posts reflect concerns still related to USDT's overall #solvency and the non-0% chance of Tether potentially being unable to back the amount of dollars and various crypto being invested into it.
More specifically, however, Tether's team has been spreading a discussion related to an attack on USDT, both on DeFi and centralized exchanges. Tether, in the statement below, seems to allude to the fact that this attack could have been orchestrated by CoinDesk, implying that this happened on the same day that some of their materials were provided to the company. This could be true, and it may not be. But it's clear that the asset and news publication don't have the most rosy relationship with one another.
Looking at what impact this depeg and (alleged) "attack" had on the on-chain side of things, we can see that Tether had over $10B in transaction volume Thursday. This was the highest amount of volume in over 3 months, when Tether saw an even larger spike when its price went the opposite direction and jumped to $1.025 for a brief period of time.
The unique amount of USDT tokens being moved also raised eyebrows. Of the $10.02B in transaction volume, 2.39B unique Tether tokens were moved on the network. This was also the highest level since March.
And yes, it appears that many traders got spooked when they saw this latest Tether depegging below $1. A massive realized loss spike showed on the network, indicating a large amount of traders and hodlers disposed of their tokens while the asset's market value took a dip.
And last but not least, take a look at how Tether's supply on exchanges has fallen below 18.7%. We last saw an aggressive dip like this in May, 2020, which ended up being a fantastic time to buy.
All of this said, traders will want to keep a close eye on this Tether story. Often times, one depegging of a highly popular stablecoin is followed by a series of future ones. Especially when the topic of solvency begins to come into the picture.
We will keep our entire community updated on further developments.
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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.
