Ever since Tether temporarily lost the dollar peg last week, rampant liquidation appears to have happened. Apparently, the crypto crash induced by the depegging of another stablecoin, Terra’s UST has had significant effect on investor sentiment.
Massive Tether Liquidation
According to CoinGecko data, as much as $7 billion worth of Tether has been liquidated in the space of one week. From having a market cap of $83 billion last Tuesday to having dropped to $75 billion now, the world’s largest stablecoin suffered a major blow.
Tether also holds the distinction of being the third-largest cryptocurrency, even now. Another stablecoin, USDC, with a market cap of $52 billion, stands at fourth position in terms of market cap. Interestingly, USDC’s circulating supply grew by $4 billion from $48 billion last week, despite widespread market resistance against stablecoins.
On Thursday, Tether price dropped to 95 cents amid a stablecoin meltdown in the cryptocurrency market. This led to a debate among traders over the trustworthiness of stablecoins. Whether there were enough fund reserves that act as collateral to back the stablecoin supply was the cause of concern.
‘Tether Fully Backed’
In this context, Paolo Ardoino, chief technology officer of Tether, said, “Tether is fully backed.” He was responding to a tweet on Tuesday from an analyst asking if all the $75 billion worth of Tether is fully-backed or not.
