Even large cryptocurrency investors felt psychological pressure on their USDT holdings
According to the most recent data from Saniment, whales actively sold their USDT holdings in the market following the risk of de-anchoring. Yesterday, the price of USDT fell to $0.97 for a while, but then recovered to $1.
As on-chain data suggests, key whale addresses sold $710 million of Tether in yesterday’s trading session only. The massive selloff is now considered the largest one-day dump of USDT on whale addresses. Santiment has provided no data about the network that these addresses were tied to.
The main reason for such panic among the whales was most certainly related to the UST’s problems maintaining the peg with the US Dollar. The most stable assets in the cryptocurrency market have reported massive outflows from exchanges and decentralized smart contracts.
U.Today previously covered the main reasons allowing Tether to maintain the USD peg and have a superior place on the market compared to algorithmic stablecoins like Terra’s UST, thanks to a different mechanism for keeping the stablecoin’s link with the U.S. dollar.
Tether’s reserves are significantly larger than those of LFG, and the stablecoin is backed by real cash as well as a small portion of digital assets and commercial paper. Diversification is the main ingredient to keep USDT more stable compared to stable assets backed by highly volatile cryptocurrencies.
According to the coin’s price history on CoinMarketCap, Tether had almost no issues keeping the $1 price despite a brief drop below $0.99 during extremely high volatility on the cryptocurrency market, which was the reason behind yesterday’s drop to $0.97.
