The continued reluctance towards Tether (USDT), the largest stablecoin and an altcoin, appears to have spread to the largest wallets, according to new data. Here are the details…
Whales sell USDT and buy from these altcoin projects
Data from blockchain analytics firm Santiment shows addresses holding between 100,000 and 10 million USDT are near three-year lows in terms of retained supply. The trend is emerging as the number of traders selling USDT for other stablecoins such as USDC and DAI is increasing. This also caused the DeFi platform Curve to have a severe USDT imbalance in its liquidity pool. Because more and more traders exchanged the coin for other tokens. About 63 percent of Curve’s 3 pools are USDT. So, roughly $630 million.
The decline in the number of large accounts holding USDT indicates that some traders have lost faith in the token. Repeated dumping of stablecoin can put pressure on Tether’s payment mechanism. It could possibly unstabilize the token. USDT has been trading at a marginal discount from its fixed price of $1 for nearly two months since the Terra crash. Tether has shown a steady redemption of nearly $20 billion worth of tokens over the past two months. He is also confident his reserves can handle further selling pressure.
Uncertainty over Tether reserves
Much of the selling pressure on USDT this year is due to uncertainty over the nature of its reserves. Tether claims its reserves are overseen by a Cayman Islands-based organization. However, some investors have called for a more comprehensive breakdown of their holdings. Data from Tether shows that 85 percent of its reserves are made up of cash and commercial papers, including US Treasuries. However, investors are trying to clarify the non-US commercial documents held by the firm.
As of Tether’s last audit, the firm holds roughly $20 billion worth of commercial documents, most of which are rated investment grade. But it is not clear who made them. As we have also reported as Kriptokoin.com, USDT is a stablecoin issued by Tether and reflects the price of the US dollar. The US dollar constant of the token is an amount of commercial paper in USD value equal to the number of USDT in circulation; fiduciary deposits, cash, reserve repo notes and treasury bills are maintained in reserves.
It was originally launched in July 2014 as Realcoin, a second-layer cryptocurrency built on top of the Bitcoin Blockchain with the use of the Omni platform. It was later renamed USTether and finally USDT. In addition to the Bitcoin network, USDT was later updated to run on Ethereum, EOS, Tron, Algorand and OMG Blockchains.
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