USDT’s Woes Continue As Market Drops Further
Investors are now opting for other safer coins with GUSD taking the pole position.
Tether Loses $250 Million In Market Cap
Tether’s USDT is among cryptocurrencies that have experienced a tough October. Data indicates that USDT’s market cap has dropped to $2.11 billion. This comes after $250 million worth of tether was withdrawn from the market.
Following the withdrawal, USDT’s dollar peg also dropped to stand at lows of $0.8697. The drop was followed by a major increase in the trading capacity. Despite the drop in tether's value, other major cryptocurrencies recorded major gains. Bitcoin, ethereum and XRP have recorded gains of 7%.
In the recent days, USDT token has been dropping significantly. Data from the market showed that by Thursday, the market had less 600 million tokens compared to a similar period in the past week. Investors might be exploring other stablecoins considering that 250 million USDT tokens were removed from the market.
GUSD by Gemini is emerging as the alternative stablecoin for investors. The coin is seeing an increased demand, something that has led to its value standing at $1.19 by Wednesday. We also have PAX and USDC as the alternative stablecoins for investors in the sector.
Rumours have been circulating that tether was being removed from a number of the trading platforms. This reports led to uncertainty on the side of investors. Recently, Bitfinex stopped all fiat deposits on its platform. This move has been cited as the major cause behind the dropping USDT market cap. USDT owner, Tether Limited has come out to assure investors that it has sufficient reserve to coincide with each USDT token. However, many experts have questioned the truth in this assurance.
According to Charles Hayter from CryptoCompoare, questions around USDT are equally the result of its delisting from a number of exchanges and drop compared to the dollar peg.
Other unconfirmed reports show that Tether might have inked a deal with a new financial facility from the Caribbean. The bank in question is Deltec Bank based in the Bahamas. The bank is rumoured to be holding USDT’s reserves. A look at other stablecoins, we can see that they have broken their dollar peg, either by dropping or rising over the $1 mark.