Gemini Stablecoin Hits Highs As Tether Continues To Decline
On the other, the prominent USDT continues to perform poorly due to withdrawal from circulation.
GUSD Shatters Dollar Peg
The GUSD stablecoin from Gemini has shattered its peg with the dollar. By press time, GUSD had moved over the peg to trade at $1.19. Since its launch last month, the figure represents the stablecoin’s all-time high in value. On Monday, it first moved to $1.14 before stabilizing at $1.18.
GUSD is a product of Gemini trading platform that is being operated by the Winklevoss twins. The stablecoin was issued after receiving the necessary approvals from authorities in New York.
During the release, Gemini maintained that the token will be solely pegged to the dollar. The main goal for launching the stablecoin is to offer liquidity for traders. It will mainly effect traders who are aspiring to cut on time wastage while purchasing cryptos. Normally, there are delays when converting cryptos into dollars.
As the fortunes of GUSD keep improving, on the other hand, USDT has broken its peg to the lower side. The prominent global stablecoin has hit the lowest point in 18 months to trade at $0.69. A number of issues are believed to have contributed to this drop.
On Tuesday, Tether appeared to gain and traded at $0.98. However, the market volume has dropped significantly due to a drop in supply of tokens. Data from CoinMarketCap shows that nearly 2.26 billion in tether tokens are still in circulation. The market is believed to have about 3 billion USDT tokens.
Interestingly, on Sunday, the market had about 2.67 billion USDT tokens. A week earlier total tether tokens in circulation stood at 2.8 billion. This drop is an indicates the falling token market cap. The current market cap stands at $2.2 billion which is a decline from $2.4 billion in a span of hours. One week ago, USDT market cap matched the tokens in circulation at $2.8 billion.
Additional data shows that USDT tokens are being withdrawn from the market at unique intervals. This is according to data from CoinMarketCap.
An official from Bitfinex has come out to explain the reason behind this withdrawal. According to Kasper Ramussen, the circulation of Tether has declined due to redemptions.