Tether (USDT) Jumps to $0.99, Fighting to Recover its Dollar Pegged Status
After a flash crash yesterday that dragged USD-backed stablecoin Tether (USDT) down to almost $0.91, the coin has now managed to recover the majority of losses and is back up at around $0.99.
The crash appeared to be the result of investors moving money out of the project and into Bitcoin (BTC) or other stablecoins like Gemini dollar (GUSD), TrueUSD (USDT) or new Circle-backed stablecoin USDC.
The flash crash comes on the heels of a sudden 1 percent drop earlier this month that shook investor confidence and resurfaced previous debates regarding Tether’s auditing and whether it’s truly backed by dollar reserves. Following that news, cryptocurrency exchange giant Bitfinex, which holds large USDT reserves, announced it will pause accepting fiat deposits on certain accounts. When Bitcoin (BTC) shot up to $7,700 on the exchange yesterday while USDT fell, some even speculated a pump ‘n dump scheme.
In light of the troubles Tether has been experiencing this year, several new competing stablecoin projects have come into existence with better auditing and financial backing. While Tether has managed to maintain its superiority in the market up until now, yesterday seemed to indicate the beginning of the end for the coin.
Now, however, the king of stablecoins appears to have regained its crown – at least for the time being. Tether’s price sharply corrected to almost $1.00 at around 10 pm GMT today as a massive wave of fresh volume was injected into the project. Volume flew up from $4k to $1.64 million in a matter of minutes.
Volatility remains a problem though, with the stablecoin dropping sharply to $0.96 soon after. Whether it will be able to climb back and maintain stability at $1.00 is yet to be seen.