But the wider economy and inflationary pressures are far from the only factors currently affecting cryptocurrencies. The collapse of Terra Stablecoin (UST) has caused waves of panic in the market. But UST is just one of many stablecoins.
By far the largest is Tether or USDT. It is currently ranked third in terms of total market capitalization, just behind Bitcoin and Ethereum. According to Coingecko, the total market capitalization of the USDT has fallen from about $ 83 billion on May 11 to less than $ 75 billion since May this year.
This decline is reportedly due to a series of buyouts, which were redeemed for the full value of one US dollar.
Should we be worried about the USDT?
It is important to note that USDT and UST are fundamentally different from each other.
UST relied on algorithms to maintain its connection, connecting it to another token called Luna. During the crash, the value of the Moon went from over $ 80 to nothing, which means that the peg, or attachment to the dollar, could not be maintained.
On the other hand, USDT is reportedly supported by Fiat and other reserves. Despite Tether maintaining his value, for now, questions remain about his level of transparency. Last year, the company paid an $ 18.5 million fine to the New York Attorney General’s office.
In a statement, New York Attorney General Leticia James declared: "Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines." For now, it seems that Tether can withstand these fluctuations and keep its fixation of one dollar, but if Tether fails, the cryptocurrency would face an apocalypse like never before.
As always, trade carefully and be aware of the risks! Tether is the only cryptocurrency based on blockchain that has coverage for all its tokens in another currency such as the dollar, euro or Japanese yen. Tether tokens, the original Tether network tokens, are traded under the USDT symbol.
Tether belongs to a type of cryptocurrency called stablecoin, which means it should be more stable than other cryptocurrencies. Tether's goal is to maintain stability, unlike other popular cryptocurrencies such as Bitcoin and Ethereum, which are characterized by high price volatility.