Analysts urge calm as Tether declines from USD, Bitcoin loses $17K rebound
Bitcoin (BTC) and crypto markets saw fresh volatility on November 10 after stablecoin Tether (USDT) was disconnected from the US dollar.
Tether exec: “No problems” with USDT
Data from Cointelegraph Markets Pro and TradingView showed USDT hit a low of $0.971 on Bitstamp on the day, amid fears that the largest stablecoin by market capitalization could fall further.
These fears were fueled by evidence that FTX and sister company Alameda Research were attempting to short USDT.
Currently in the midst of a crisis reminiscent of the Terra LUNA debacle, both firms have fallen into the cryptocurrency community and beyond as regulators increase scrutiny of the industry.
The impact has been felt across crypto prices, with BTC/USD hitting a more than two-year low of $15,638 on Bitstamp.
Commenting on USDT moves on the day, CTO Paolo Ardoino urged calm.
“Tether processed ~700 million redemptions in the last 24 hours. No problems. We continue,” he confirmed in a tweet.
That message reiterated Tether’s official stance already published the day before. In a blog post, the USDT issuer stated that it had no direct exposure to FTX or Alameda.
“Tether is completely unexposed to Alameda Research or FTX,” it said.
“Tether tokens are 100% backed by our reserves and the assets backing the reserves exceed the liabilities.”
TRON DAO Reserve says it will buy 300 million USDT
Michaël van de Poppe, founder and CEO of trading company Eight, was another of many voices urging market participants not to overreact to the ongoing volatility.
Related: Tron’s stablecoin USDD loses dollar peg on suspected sale by Alameda Research
“Panic over markets as USDT diverges slightly from USD. It always happens in these times. No need to over stress and most likely bounce back towards 1:1.” he argued.
In the wake of Tether LUNA, USDT briefly dipped below $0.96 and soon recovered its USD peg.
“The exchange rate is IRRELEVANT as long as Tether is able to redeem every 1 USDT for 1 USD,” part of a tweet from popular analyst Duo Nine continued.
“Big whales will just go to Tether and get the USD to parity. Don’t be fooled! The only reason the peg won’t recover is if Tether isn’t 100% covered.”
Meanwhile, in a strange development, decentralized cryptocurrency reserve TRON DAO Reserve announced that it would buy 300 million USDT on the open market.
The goal, it said in a tweet, was to “protect the overall blockchain industry and crypto market,” without providing further details.
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