Can Tether Maintain Its 1:1 Peg Against the U.S. Dollar?
A new wave of doubt and concern has hit the crypto markets this last week. The problem this time is USD-Tether (USDT), a digital asset or stablecoin pegged to the dollar at a 1:1 ratio (supposedly).
While currently trading at an average of $0.96, credibility around Tether is at all-time lows. Failing to maintain its peg against the U.S. dollar, it has slipped down as much as 10% on some exchanges, signaling growing concerns and prompting traders to diversify to other stablecoins or cryptocurrencies.
Other recent red flags include Tether & Bitfinex desperately trying to convince the sector it is not insolvent, with other information circulating about the location of Tether’s reserves and news of Noble Bank and potentially HSBC refusing to service Bitfinex and Tether, the amount of distrust has only intensified amongst the market and wider crypto community.
Lack of Trust in Tether is Nothing New…
It’s nothing new that the markets are skeptical about Tether. Late last year, it claimed it was the victim of a theft resulting in $30 million of its tokens being stolen.
On top of that, Tether and digital asset exchange Bitfinex were subpoenaed in early 2018 with little result, while both were accused of committing market manipulation together.
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