2018-11-13 19:09 |
The widely used and controversial stablecoin, USD Tether (USDT), is struggling to remain pegged to the USD. A few weeks ago, USDT crashed against the USD and reached a low of 0.85. Many exchanges price their assets against USDT, and this event resulted in the prices of these exchanges trading at a premium.
USDT had since begun to recover but the price action of the last week shows the stablecoin once again starting to decline. The value of the coin currently trades around 0.97 against the USD, and there is much fear of a similar drop to the one we had seen when USDT crashed to 0.85.
USDT Versus USD Daily Chart – Source: Tradingview.comThe stablecoin is used for pairing against cryptocurrencies on many major exchanges such as Bitfinex and Binance. There has been speculation as to the reason for the drops.
One theory was that large traders referred to as whales dumped significant amounts of USDT into the market believing that market prices are reaching a bottom and changing their exposure from USD to cryptocurrency. Another theory is that the company behind USDT do not have the USD to back up the USDT and this is the reason it is losing its value.
There have been numerous competitors entering the market such as True USD (TUSD), The Gemini Dollar, and USD Circle. Going forward, we may see a competitor to USDT become the most widely used as USDT seems to be struggling to maintain its peg to the USD.
Key Takeaways: USDT crashed against the USD to 0.85 weeks ago and had begun to recover. Over the past week, USDT has begun falling again and is currently trading at 0.97. It looks likely to fall further. Numerous competitors to USDT have launched, and a continued failure to remain pegged may result in a new stablecoin becoming the most widely used. DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.Tether Price Analysis: Stablecoin Tether [USDT] Fails to Remain Pegged to USD was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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