CryptoWhale says that the failure of stablecoin is a matter of time.
The market capitalization of Tether just dropped by $800 million at 12.00 PM, Paris time as the stablecoin continues to lose its capitalization. This was reported by Cryptowhale in a tweet seen by Cryptoinfowatch.
A look at the USDT chart shows that the stablecoin’s market capitalization has been reducing since May, 2022. This has not destabilized the peg of the stablecoin to the dollar, even though there have been allegations that it was not fully backed by dollar reserves. This issue was later resolved after the CFTC sanctioned Tether LTD and its subsidiaries.
Continuous Drop in USDT Market Cap
On May 12, USDT market capitalization dropped to $82 billion from $83 billion the previous day. On May 13, the market cap dropped to $79 billion. On May 14, it dropped further to $77 billion. The following day, another $1 billion was removed from Tether circulation bringing it down to $75.6 billion.
if… more like when.
And anyone holding crypto on exchanges will be screwed. Expect all of the big ones to halt everything.
— CryptoWhale (@CryptoWhale) June 17, 2022
By May 18, it had dropped to $74 billion. On May 21, USDT market cap dropped to $73 billion. On May 27, it dropped to $72 billion. On June 14, it further dropped to $71.5 billion. It dropped further on June 15 to $70.8 billion. By June 16, it dropped to $70 billion. By today, June 17, the USDT market capitalization dropped to $69.15 billion.
A Sign of Robustness?
According to Tajo Crypto, a trader, the drop in USDT market cap is a testimony to the strength of the stablecoin, which is backed by the USD. He said,
“It’s not suspicious, it actually shows how robust USDT is. USDT has been able to go from over $80 billion market cap down to $69 billion without losing its peg. And they are still strong to redeem any amount on request. USDT is very liquid and highly redeemable.”
However, according to Cryptowhale, it is just a matter of time before USDT gives way. He said that folks who have their Bitcoins in exchanges will be …