Leading stablecoin Tether (USDT) is currently trading below its $1 peg following increased crypto market volatility that pushed the price of BTC below $25,000. At the time of writing, USDT trades at $0.997, a slight bounce from its $0.995 low earlier in the day. Notably, the latest depeg is the lowest the stablecoin has traded since January 1.
(Source: CoinMarketCap)
However, Tether’s chief technology officer, Paolo Ardoino, attributes the depeg to “edgy markets” and attackers capitalizing on the opportunity to maximize profits. Yet he assured followers that Tether welcomed the attack and is ready to “redeem any amount” that USDT holders want to convert to cash.
In a separate thread, the Tether CTO reiterated that the company is well-capitalized and maintains an excessive reserve of $1.5 billion used for its monthly Bitcoin purchases.
1.5B in BTC are bought with excess reserves, that is company own equity.
The company is currently overcapitalized by 2.5B+ (on top of the minimum 100% reserves that we have to cover all outstanding tokens, among which the vast majority is t-bills).
A refresher on excess equity…— Paolo Ardoino ???? (@paoloardoino) June 15, 2023
Meanwhile, the latest USDT depeg has seen the stablecoin’s market cap lose roughly $300 million. However, the decline is just a minor dent in what has been a year of tremendous growth for Tether (USDT), now valued at over $86 billion. Tether’s market capitalization has soared to new highs following troubles at major competitors Circle and Binance. While Binance’s BUSD gradually winds down following regulatory action, Circle USD (USDC) has been plagued by banking woes.
