Tether (USDT) has surprisingly dipped massively below $0.99. As this happens to the largest stablecoin, while investors are nervous, Tether has insisted that operations are continuing as normal.
12th of May has also seen a huge dump in the Bitcoin market as the flagship cryptocurrency fell out of its long-term trading range. The ongoing sell pressure has reduced markets to 2020 levels.
Tether (USDT) Trembles as TerraUSD (UST) Remains below $0.60
According to the data from TradingView, BTC/USD has exited the range in which it had traded since the beginning of 2021.
At the time of filing this report, the pair is said to be trading at $26,700 on Bitstamp, representing its lowest since the 28th of December 2020.
The weakness came as fallout from the Terra stablecoin meltdown continued to ricochet around crypto and beyond, with rumors claiming that even professional funds were experiencing solvency issues due to losses on LUNA and UST.
"People are still processing this but this is the Lehman moment for crypto"
Hearing about a lot of funds possibly insolvent from Luna meltdown
— Frank Chaparro (@fintechfrank) May 12, 2022
The current focus of Terra executives is committed to restoring its U.S. dollar peg, UST stablecoin, which was standing around $0.60. Obviously, the stablecoin is still far from $1 but more than double the week’s record lows.
The effect of this notable crash was soon noticeable across the crypto markets as the largest stablecoin, Tether (USDT), started to replicate UST’s downfall. At press time, USDT is trading at $0.9843, with a relatively 2% price downtrend in the last 24 hours.
Reacting to the latest development, Tether chief technology officer Paolo Ardoino said that withdrawal of USDT continues as normal.
In recent tweet, Ardoino wrote, “GM Reminder that tether is honouring USDt redemptions at 1$ via tether.to . >300M redeemed in last 24h without a sweat drop.”
Reminder that tether is honouring USDt redemptions at 1$ via https://t.co/fB12xESSvB .
>300M redeemed in last 24h without a sweat drop.
— Paolo Ardoino (@paoloardoino) May 12, 2022
It’s also shown by an on-chain analytics firm CryptoQuant that stablecoins on major exchanges had witnessed record outflows.