The consequences of the stablecoin market’s destabilization continue to unfold. Daily outflows from Tether, the largest stablecoin (USDT), have averaged more than $1 billion over the past week.
Crypto investors and traders withdrew about $8 billion from Tether (USDT) in the past week, which is nearly double the amount from Tether’s last reserves report dated December 2021. As a result, the stablecoin’s market cap has fallen by 8.4% to $76 billion over the last seven days.
Earlier, in order to keep USDT pegged to the dollar, Tether Consolidated Reserve announced that the amount of security for the stablecoin covers the tokens already issued and is about $78.6 billion. So the company had about 5% cash among its assets, while the rest of the portfolio was bonds and treasury bills. The latest transparency report shows that 6.36% of Tether’s assets are held in cash.
The company has the resources to maintain a stable value of USDT despite the outflow of investor funds caused by the TerraUSD (UST) crash, which triggered a panic not only in the stablecoin market, but also in the entire crypto market. The market panic caused Tether (USDT) to trade below $0.99 on major exchanges last week. However, Tether CTO Paolo Ardoino was quick to say that the stablecoin would maintain a one-to-one exchange rate on the company’s website. He also said that Tether is reducing its exposure to commercial paper, but still has a large portion of its reserves in US Treasuries.
