Tether, one of the largest stablecoins in the OTC crypto market, has now regained its $1 market value. The cryptocurrency market took a downward slope in the past few days.
Yesterday, Tether lost $3 billion worth of tokens in less than 24 hours. The massive volatility shook the market, plunging the price of other coins.
Tether's chief technology officer, Paolo Ardoino, went to Twitter and reassured its investors that all is well, despite the billions of drawbacks in the company.
During an hour-long Twitter Spaces live audio, Ardoino stated, "We had pretty much $3 billion [in] redemptions, and they were liquidated pretty quickly through our banking channels."
Around $79.5 billion worth of Tether is currently in circulation, which is a decrease from the previous supply of $82.9 billion just twenty-four hours ago. indicating that the organization that was responsible for it processed more than $3 billion in redemptions in just one single day.
The value of the cryptocurrency, which is supposed to remain at $1 at all times, dropped as low as 95 cents and has had a difficult time climbing back up to its intended $1 peg.
On Friday, the price of tether was back to trading steadily at $1. This eased the worries of investors who were worried that the failure of the troubled stablecoin project Terra could spread to the rest of the crypto market.
Stablecoin Tether Stabilizes
The stablecoins became one of the biggest causes of the cryptocurrency market's crash during the recent market meltdown. Stablecoins like Terra and Tether are well-known for being a safe and dependable way to invest in an ever-volatile market.
As an example, Tether is designed to be backed by cash in the form of short-term debt obligations that equate to an equivalent amount of dollars deposited by its users. These assets are part of a reserve that is overseen by a firm with the same name as the reserve.
This means that the fiat money invested by the people who are holding on to Tether, has an equivalent value of $1.
When there is heightened market volatility, cryptocurrency investors frequently turn to tether as a safe haven because it functions just like a bank account.
Cryptocurrency Market Volatility & Panic
Yesterday, May 12, Bitcoin's price crashed to its lowest price ever, at $27,208. Last year in November, when Bitcoin was at an all time high, the price became $67,553.
As a result, Bitcoin and the broader cryptocurrency market went into another downward spiral as a result of market reaction to Tether's (USDT) loss of parity with the dollar.
As reported by CNBC, investors became concerned that another stablecoin would fail, Bitcoin fell to a day low of $25,836 and the overall crypto market value reached $1,082 billion.Prior to the implosion of TerraUSD and Terra LUNA on Monday, the market capitalization had previously reached a current week high of $1,569 billion.
Stablecoin moves led to another session with a lot of ups and downs. Bitcoin ran into trouble again at $30,000 before volatility came down. As of this writing, the price of Bitcoin is $30,481, up 9.9% in the last 24 hours of trading.
The extreme volatility yesterday was caused by the panic of a large user base rushing in to secure their crypto holdings. The market anxiety was made worse by how people felt about TerraUSD (UST), Terra (LUNA), and Tether (USDT) as they dipped below their $1 value.
According to CoinDesk, the price of Tether (USDT) today, March 13, is $0.999536, indicating that it has returned to its alleged dollar peg.
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