Panic across the crypto market early Thursday morning in Europe puts the stablecoin Tether (USDT) under stress from its peg to the US dollar as the token trades as low as $0.91 on some exchanges. The crash has led some to wonder why arbitrageurs don’t seem to want this “free money”.
At the time of writing, the USDT has already pared most of its losses, although it still remains significantly below its parity. On Coinbasethe stablecoin was trading for 0.983 USD and on kraken for 0.982.
Daily evolution of the USDT/USD parity on Coinbase:
At its lowest level, the stablecoin touched $0.91 around 07:20 UTC on Bitstamp, 9% below its peg.
Evolution of the USDT/USD parity on Bitstamp:
The pressure on Tether’s peg led to a new wave of speculation in the crypto community about what happened.
“Call it FUD (Fear, Uncertainty, Doubt) if you like, but this sustained deviation from parity is really unusual. Normally it recovers quite quickly,” said writing a popular user, while several others speculated that the stablecoin was also under some sort of economic attack.
The statements of Samson Mowformer Chief Strategy Officer of developer Bitcoin (BTC) Blockstreamseem to want to go in the same direction: according to him, people should “know when certain actors are simply trying to cause panic.”
“USDT is not going to lose its peg,” Mow told his 200,000 followers.
The tense situation also led Tether’s technical director, Paolo Ardoinoto publicly remind that USDT can be exchanged for USD via the Tether website.
And since each USDT can easily be exchanged for 1 USD, some users wonder what is the reason why USDT was then trading at such a low price (0.945 USD) on the crypto exchange. FTX. Some have even suggested that the exchange’s parent company, Alamedadoes not want free money.
It is common knowledge that the crypto trading company Alameda Research is a major player in market making and arbitrage operations on FTX. The trading company was originally founded and led by crypto billionaire and CEO of FTX, Sam Bankman-Friedbut is now run by former bond trader Sam Trabucco.
Cryptonews.com contacted Tether for comment.
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