The crypto world is going crazy after Terra’s stablecoin UST lost its peg against the dollar, deflating to around $0.22 and its $Luna token is now worth only a tiny fraction of a cent, after trading for $50 not too long ago.
Now, tech media is reporting that the instability has extended to another stablecoin, Tether (USDT) which has been widely known as the most prominent crypto token of its kind.
Tether has always been pegged to the dollar, but now traders are seeing it sell for $0.96 on some platforms.
Small price fluctuations have led to traders doing arbitration between exchanges such as Bitfinex and Kraken.
“Tether continues to process redemptions normally amid some expected market panic following yesterday’s market,” said a Tether spokesperson, according to coverage by Shaurya Malwa at Coindesk. “Tether has not and will not refuse redemptions to any of its customers, which has always been its practice. On Bitfinex the Tether peg is >1$ while on Kraken it is slightly lower than 1$. This has resulted in arbitrageurs buying USDT cheap on Kraken and selling it on Bitfinex for profit. While other market makers have bought USDT < 1$ on Kraken and directly redeemed it for 1$, still enjoying the profit. But all this is pure market dynamics and has absolutely nothing to do with the value of tether, which continues to hold its peg.”
Meanwhile, Bitcoin recently sunk as low as $25,000 before floating back up to around $31,000 as of press time.
That’s far below where many people thought it would be this time last year, with rosy predictions of $100,000 per coin and beyond.
In the wider crypto market, it seems that BTC hodlers, who are long-term buy-and-holds, may be waiting a while for profit-taking, since Bitcoin is at about half of all-time highs at $60,000.
What’s the play for today’s crypto market? Is this an opportunity to buy on a dip?
Take a look and think about what this change means for your portfolio.
