Tether Peg Schluckauf is nothing new

Tether Peg Schluckauf is nothing new

The price of the StableCoin Tether (USDT) fell to 97 cents on Thursday, according to Blockworks, on Thursday, which fueled fears regarding the stability of their bond with the US dollar.

A downward trend on the crypto-asset markets-this week due to the solvency crisis from FTX and Alameda Research-prompted traders to search for a safe harbor in stable coins.

The sudden drop in prices from Tether This morning led to dealing with alarm. In times of increased market volatility, however, temporary price fluctuations are not uncommon.

usdt is considered the backbone of the cryptoasset ecosystem and accounts for almost 9 % of the total market capitalization of digital assets. The coin is allegedly $ 1: 1 covered by US dollars and highly liquid assets-which maintains his "coupling" to the Greenback-although Tether's track record in relation to transparency has been criticized in the past.

"In times of market volatility, the trading price for USDT, which is listed on the stock exchanges, can fluctuate", according to the company said

In fact, after the implosion of the Terra ecosystem and its VAT stable, the price of USDT has dropped.

"This happens because more liquidity is in demand than there is in the order books of this stock exchange, and has nothing to do with Tether's ability to keep his bond, or with the value or composition of its reserves," said the company.

"Industry critics and skeptics have been wronged by remaining uninformed and having drawn premature conclusions," he added.

The price of Tether is also reflected in the on-chain liquidity, mainly via the curve on Ethereum In liquidity on the three largest stable coat systems DAI, USDC and USDT, where changes to supply and demand can affect the price of Tether.

In the early Thursday, the 3pool of Curve got out of balance, a sign that some industry participants began to shorten Tether.

A higher percentage of USDT in the pool reflects a decline in the relative value of USDT compared to USDC and DAI.

In general, the possibility for large market participants to redeem USt against dollars, such de-pegs only of short duration.

Indeed, Chief Technology Officer from Tether, Paolo Ardoinino, tweeted that the company "~ ~ 700 million returns [the] last 24 hours. he.

The company also confirmed that it had not granted FTX or Alameda Research - and that its tokens were covered 100 % by reserves that exceed the liabilities.

At the moment, the share of USDT in the curve pool has decreased to 67 %, with around $ 670 million available for liquidity.

"Trust is being built up for years, but can be lost in a few moments. It is easy to ask who else could fail if big and trustworthy players suddenly go under," said Tether. "Tether will continue to dispel fears and address the concerns of the community."

Since the break -in this morning, the price of Tether has recovered 1.01 $ .

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The contribution Tether PEG Hiccups are nothing new is not a financial advice.