Tether (USDT) recently lost its peg to the U.S. dollar. Although USDT is the most valuable stablecoin by market cap, the market turbulence did not spare the asset.
Last week, USDT depegged below $1 and stayed below the $1 peg for the longest time since the collapse of FTX, before making a recovery at the end of the week.
Selling pressure is still significantly higher than the previous week, as trading volume has dropped by 77% over the last 24 hours, while market cap progressively heds value.
However, the cryptocurrency has succeeded in clearing off hourly losses. According to data from CoinMarketCap, USDT is now trading at a press time price of $0.9996.
It bears mentioning that it wasn’t all chaos for the stablecoin. According to MessariCrypto, a leading provider of crypto market intelligence products, USDT saw a major change in the movement of its circulating supply.
On previous occasions when USDT had traded below $1, Tether’s market cap dropped significantly. This time, USDT’s redemptions surged to levels last seen in 2022 while supply remained stable.
As Messari explained;
“USDT also saw the highest amount of redemptions ($325m) since November 2022. Unlike previous depegs, where Tether’s market cap decreased significantly as redemptions rose, USDT’s circulating supply remained at similar levels.”
The instability comes not long after Tether rolled out its newly attained milestones from the second quarter of 2023. As the report noted, the company generated more than $1 billion in operating profits.
“Tether’s operational profits are over $1B for the period of April 2023 to June 2023, which corresponds to a significant 30% increase quarter over quarter.” The report read.
Additionally, Tether’s $72.5B in exposure to US T-bills is greater than Australia, Mexico, and the UAE. Tether also holds an estimated 8.5% of its total assets in Bitcoin, other precious metals, and other investments in energy production.
Tether also made efforts to tackle the continuous scepticism surrounding its current reserve levels, stating that its reserves are extremely liquid.
The CTO of Tether, Paolo Ardoino, went on to explain that transparency is not just a buzzword for the Tether network. “It [transparency] is the cornerstone of our philosophy.” He stated.
Conclusively, Messari maintains that despite the instability of Tether and the USDT stablecoin, Tether’s market shares are larger than it has ever been.
