Stablecoin USDT Experiences Deepest Depeg Since LUNA-UST Collapse
The leading stablecoin in the crypto market, Tether (USDT), unexpectedly slipped from its $1 peg on the afternoon of November 10.
Update as of November 10, 2022:
As of 9:00 PM, USDT showed signs of recovery, rising back to $0.994 on CoinMarketCap, and the BUSD/USDT pair dropped to 1.005 on Binance.
Several factors may have contributed to USDT's recovery from its severe depeg. Positive October 2022 CPI news likely provided a breath of relief for the crypto market, which had been under pressure due to the FTX-Alameda crisis. Additionally, news that the TRON DAO fund purchased $1 billion USDT to address the USDD depeg issue may have also helped stabilize USDT.
To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve will purchase total 1 billion USDT. You may see the change of balance on https://t.co/L52UWqhmkR and all the reserve will be in CEXs.
— TRON DAO Reserve (@trondaoreserve) November 10, 2022
Original Article:
According to CoinMarketCap data, the USDT/USD rate across various exchanges dropped to as low as $0.9842 this afternoon, deviating more than 1% from the $1 peg it is supposed to maintain.
This is the deepest depeg USDT has experienced since the LUNA-UST collapse week, and it is even more severe than previous instances.
USDT/USD Exchange Rate Volatility from Early 2022 to Date, Screenshot from CoinMarketCap at 7:20 PM on November 10, 2022
On Binance, the BUSD/USDT rate surged to 1.032, the highest level seen in the latter half of 2022.
Unlike the earlier depeg incident reported by Coin68 on October 9, which was due to a technical glitch with CoinGecko, this depeg was reflected through trading prices across exchanges.
BUSD/USDT Daily Chart on Binance at 7:20 PM on November 10, 2022
On Twitter, rumors are spreading that Alameda Research may be involved in the depeg, with reports of transactions involving borrowing USDT for sale.
Alameda research is opening shorts on USDT.https://t.co/J3wzpOZ4G4 pic.twitter.com/sAdl0OK1SM
— mhonkasalo (@mhonkasalo) November 10, 2022
so alameda is trying to short $usdt?
— astromagic (@astro__magic) November 10, 2022
>supply USDC on aave
>borrow USDT on aave
>swap USDT to USDC on curve
dafuq man...https://t.co/F3tQvDMfF8
Another stablecoin, USDD from Justin Sun, also experienced a depeg recently, with rumors suggesting Alameda's involvement.
In response to these rumors, Tether's CTO, Paolo Ardoino, affirmed there is no connection with FTX or Alameda and stated that users can still redeem USDT for USD normally.
#tether processed ~700M redemptions in last 24h.
— Paolo Ardoino 🤖🍐 (@paoloardoino) November 10, 2022
No issues.
We keep going.
“Tether has processed around $700 million in withdrawals over the past 24 hours without any issues. Everything is fine.”
