Is Tether next? Stablecoin slips below dollar parity
The largest stablecoin by market cap has dipped below the $0.96 mark on Thursday
Tether (USDT), the largest stablecoin by market cap, has dipped below $0.96 on Thursday in what seems to be a further signal of stress within the crypto markets. Tether is down 1.65% in the past 24 hours, according to CoinMarketCap.
Designed to be a stablecoin – stable because it’s pegged to the US dollar to maintain a value of $1 – means that every unit in existence is fully backed by traditional currency, which is held in reserve. However, with the crypto sector witnessing its biggest downward trend in the past few months, its decline in price could be linked to a multitude of other stablecoins that are also trading in the red.
The price of Terra (LUNA), the native token of Terra’s blockchain, has declined significantly, and is currently down more than 90%. Terra’s UST, which was ranked among the top 10 most valuable cryptocurrencies and is the third-largest stablecoin by market cap, has also witnessed a significant decline and is now trading around the $0.69 mark, signalling an all-time low for the stablecoin.
Terra (LUNA) peaked around the $115 mark last month. On Coinbase, Terra’s price was recorded as low as $0.65.
Meanwhile, bitcoin (BTC) dropped below the $30,000 mark earlier this week, and then fell even further, to as low as $25,400 on Thursday – a level that was last seen in December 2020.
A sell-off mood continues to dominate the crypto sector, which has wiped more than $200bn of wealth from the market in just 24 hours, according to estimates from CoinMarketCap.