The ongoing cryptocurrency crash has injected chaotic sentiment among investors. The sharp drop wiped out $200 billion in value in one day.

Bitcoin alone fell below $25,000 on the morning of May 12, a price not seen since December 2020. Even Ethereum, the largest altcoin, lost about 20% of its value in just 24 hours.

In recent days, the TerraUSD (UST) stable coin, which aims to maintain a dollar rate, has dramatically decoupled from the $1 mark. It fell to a low of 30 cents on May 10. In the latest update of the saga, the project has put its entire blockchain at a stop for about two hours on May 12, during which user funds will be frozen.

From one (not so stable coin) to another

It seems that the ongoing story has spread to Tether, the largest and most systemically important cryptocurrency. Tether began de-pegging on May 11 in the wake of the UST collapse. First, it fell only slightly, from about $0.999 to $0.997, and earlier on May 13, it fell to a level of $0.95.

Source: Kaiko

After this volatility and doubts about the seriousness of to tie the loss of its $1 peg, analytic platform, Santiment stated,

“…the major whale addresses have dumped a total of $710 million in $USDT Today. This is the largest one-day landfill from 100,000 to 10M USDT addresses in cryptocurrenciesthe biggest stable currencyhistory.”

Source: Santiment

Needless to say, such a drop would give way to various speculations and FUDs within the crypto market. Ergo, witnessing a rise in social engagement measures. This is indeed the case if $USDTs has social volume peaked in 17 months influenced by the LUNA and UST Crashes.

So you may wonder what drove Tether’s de-pegging event? According to Kaiko’s analysis, during the worst period of de-pegging, there was a high volume of sell orders on FTX. In fact, the biggest sell order on FTX hit $9 million during the de-peg’s worst.

Source: Kaiko

The uncertainty surrounding redemptions could have sparked panic as the de-pegging flooded into USDT-USD trading pairs. “While millions of dollars are at stake, it remains unclear why a merchant would sell at such a discount,” the blog added.

On the other hand, on Kraken, whales bought USDT at a discount. Whale traders took advantage of this redemption mechanism, as it were, by bagging USDT at a low price.


Given the de-pegging story, the stablecoin destroyed several USDT tokens on an account known as Tether Treasury. Tether is subject to burning an equal amount of USDT when users apply to exchange the stablecoin for fiat. “Burn burn burn,” Tether chief technology officer Paolo Ardoino tweeted on May 12.

At the time of writing, Tether was up 2.5% in 24 hours as it traded at $0.9979.

This post UST to USDT: Here’s What Causes the Biggest One-Day Dump in USDT’s Addresses:

was published first on


Write A Comment