thecoinrepublic.com
Despite assurances from Tether, the leading stablecoin, that a large amount of reserves backs it and all operations are going perfectly, the market seems unassured.
However, data from a liquidity pool shows an increased supply of Tether. As of Friday, the token accounts for 65% of the total. On which, Edul Patel, the chief executive of Mudrex, a crypto investment platform, said that this clearly shows that the investors are being cautious about holding Tether.
The Terra collapse in May has made it difficult to trust Tether and asset classes alike and their claim to be backed by something. However, as per the reports from the Wall Street Journal, in the past month, short-sellers have boosted bets against Tether, citing the head of institutional sales at Genesis Global Trading, Inc., Leon Marshall.
A Tether spokesperson, in an email statement to Bloomberg, said that USDT is the most accessible stablecoin in the world and is the most widely held. Adding that, it wouldn’t come as a shock if more investors started holding it, and it was accessible to swap for other assets that they wished to utilize for other purposes. USDT is the ticker for the main dollar-based stablecoin of Tether.
Just before traders began to de-peg, the Tether’s share of supply was recorded to be 29.9% on May 6 on Curve’s 3pool, where individuals can swap between USDC, DAI and Tether. On May 12, that portion reached a whopping 82%; meanwhile, the Terra crisis deepened, destabilizing Tether from its peg.
Even though Tether’s share of supply has experienced a drop, it still remains quite distant from the TerraUSD crisis. Moreover, following the Journal report, it has reversed some of the declines.
On Friday, the 3pool platform handled about $117 million in trading volume.
After a short period of decoupling in May, Tether has adhered close to its dollar peg and investors around the world continue to use it. Meanwhile, the cost of purchasing with Argentina pesos surged after Martin Guzman, the nation’s economy minister, resigned.
As per the Bloomberg reports from February, Fir Tree Capital Management was making a substantial short wager on Tether, expecting that it would yield returns in a year.
Paolo Ardoino, CTO at Twitter, in many instances, took to Twitter to give assurance to the market since the time TerraUSD slipped. This week, in a 12-tweet-long series, the CTO shared that Tether has reduced its commercial paper holdings by around $45 billion, adding that it has “never failed a redemption.” Paolo also said that the “Tether portfolio is stronger than ever.”