Updated · May 20, 2022
Tether Briefly Dropped Below Dollar Peg Amid Crypto Crash
Updated · May 13, 2022
The world’s biggest stablecoin fell as low as 95 cents to the dollar on some crypto exchanges on Thursday.
Plunge to $0.95
Tether (USDT) dropped below its dollar peg on Thursday, underscoring the panic that has broken out in the cryptocurrency market. It is the biggest stablecoin in the world by market capitalization, with a valuation of about $84 billion.
A stablecoin is a digital asset that maintains a peg to a fiat currency, commodity, or another cryptocurrency. Tether is meant to have a 1:1 peg to the US dollar.
On Thursday morning, it sank as low as $0.95, according to data from CoinMarketCap. That 5% drop comes amid panic as a cryptocurrency crash has erased much of the market’s valuation. Bitcoin, the world’s largest cryptocurrency, traded below $27,000 at levels not seen since December 2020.
However, the stablecoin has since retraced to over $0.99 at writing time.
Tether’s slump followed the freefall of another stablecoin, TerraUSD (UST), which slipped its dollar peg and fell as low as $0.17.
“Business as Usual”
Tether’s Chief Technology Officer Paolo Ardoino sought to allay fears of the token going the way of TerraUSD.
GM— Paolo Ardoino (@paoloardoino) May 12, 2022
Reminder that tether is honouring USDt redemptions at 1$ via https://t.co/fB12xESSvB .
>300M redeemed in last 24h without a sweat drop.
In a statement, Tether announced that “it is business as usual amid some expected market panic following this week’s market movements.”
The team behind the token maintained that it is the most liquid stablecoin, backed by “a strong, conservative portfolio”.
Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.
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