When the market crashes, investors usually look to Bitcoin with furious eyes, but this time everything is different. There is a Terra-fying saga underway, in which Terra [LUNA] losing over 95% of its value in a day to trade at $0.1194 at the time of writing. As if that wasn’t painful enough, the stablecoin TerraUSD [UST] changed hands around press time for $0.6079.
However, many investors had one question in their minds: is it catchy?
Are you contagious?
Questions about his support aside, Tether [USDT] was considered a relatively stable stablecoin, so to speak, thanks to a market cap that placed it right under Ether [ETH]† However, as the FUD grew around UST, it seemed that USDT was also struggling to hold its peg.
At the time of writing, USDT was trading at $0.9809 after falling 1.89% in the past day and down 1.91% in the past week. This caused waves of panic through the crypto and DeFi communities, even as Tether CTO Paolo Ardoino tried to reassure users by tweeting that millions of dollars had been exchanged at the dollar price.
GM
Reminder that tether honors USDt redemptions for $1 via https://t.co/fB12xESSvB.
>300M redeemed in the last 24 hours without a drop of sweat.— Paolo Ardoino (@paoloardoino) May 12, 2022
So, Ardoino may believe that all is well, but what do the stats say?
Out of the pen and into the fire?
A look at USDT’s balance on exchanges tells us that USDT has been on the rise since about May 6 – even before the price crashed. However, on May 9, millions of USDT returned to the exchanges before being pulled out again. This happened when the price of USDT fell below $0.99.
Source: Glassnode
In confusing times like these, it can help to look at USDT’s market cap. As expected, the market cap had fallen to approximately $81,152,063,275 at the time of writing.
So while USDT appears to have loosened somewhat from its peg, Tether does not appear to be losing anywhere near in value as UST and LUNA did a day ago.
Source: Glassnode
Even if Cardano founder Charles Hoskinson thinks Tether is the next TerraUSD, the fact remains that USDT recovered from a price of around $0.9514 at the time of writing.
And Tu, Tether?
— Charles Hoskinson (@IOHK_Charles) May 12, 2022
That said, when USDT prices fell, Uniswap trades were a stat that increased dramatically. The number of transactions with USDT rocketed to a high last seen in February 2022, even as USDT’s price fell on May 11.
This indicates that some investors were waiting for the opportunity to execute DeFi trades at discounted rates.
Source: Glassnode
Don’t put us in the same category!
So Tether may have felt a little under the weather, but this was not the case with USD Coin [USDC] and Binance USD [BUSD]both of which briefly moved above $1 even as UST plummeted.
This post Like TerraUSD [UST] gets out of hand, is Tether [USDT] went the same way
was published first on https://ambcrypto.com/as-terrausd-ust-careens-out-of-control-is-tether-usdt-headed-the-same-way/
