The price of stablecoin Tether (USDT) briefly fell to 97 cents on Thursday, according to data compiled by Blockworks — and as low as $0.938 on the Kraken exchange — raising fears regarding the stability of its peg to the US dollar.
A downtrend in cryptoasset markets — this week spurred by the solvency crisis of FTX and Alameda Research — leads traders to seek safe haven in stablecoins.
The sudden price drop of Tether this morning led put traders on alert. However, during periods of heightened market volatility, temporary price wobbles are not uncommon.
USDT is considered the backbone to the cryptoasset ecosystem, making up almost 9% of the entire digital asset market capitalization. The coin is supposedly backed 1:1 by US dollars and highly liquid assets — which maintains its “peg” to the greenback — although Tether’s track record when it comes to transparency has been criticized in the past.
“During periods of market volatility, the trading price for USDT that i
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