Tether (USDT), the biggest stablecoin in terms of market value, has announced it was performing a "chain swap" with a yet undisclosed third party after it fell today to lows of $0.941 on Coinbase. The announcement on its official Twitter handle reads: "In few minutes Tether will coordinate with a 3rd party to perform a chain swap, converting from Tron TRC20 to Ethereum ERC20, for 1B USDt and from Tron TRC20 to Avalanche, for 20M USDt. The #tether total supply will not change during this process."
In few minutes Tether will coordinate with a 3rd party to perform a chain swap, converting from Tron TRC20 to Ethereum ERC20, for 1B USDt and from Tron TRC20 to Avalanche, for 20M USDt. The #tether total supply will not change during this process.— Tether (@Tether_to) May 12, 2022
Tether was put under increasing pressure on Thursday, with the price of one of the most important assets on the global crypto market plummeting below its $1 peg. On Coinbase, Tether (USDT) fell as low as $0.941, losing parity with the dollar. USDT/USD was trading at $0.985 at the time of writing, down 1.10%.
GM— Paolo Ardoino (@paoloardoino) May 12, 2022
Reminder that tether is honouring USDt redemptions at 1$ via https://t.co/fB12xESSvB .
>300M redeemed in last 24h without a sweat drop.
The drop came even as Tether CTO Paolo Ardoino stated on Twitter earlier today that Tether was continuing to honor "USDt redemptions at 1$" via its website, tether.to.
Tether (USDT), presently the third largest cryptocurrency by market cap, plays a key role in facilitating trade across the crypto market and also connects with the traditional financial system.
Traders sold USDT for US dollars due to a lack of enthusiasm for stablecoins in the crypto community. Waves' USDN stablecoin showed faint signs of weakness, sliding to $0.91 on Bittrex on May 9. TerraUSD (UST) de-pegged to as low as $0.22 below the dollar parity earlier this week.
The drop in Tether's price below $1 reverberated throughout the cryptocurrency market. Bitcoin, the first and most valuable cryptocurrency by market capitalization, dropped more than 7% to $25,401, its lowest level since December 2020.
Alternative cryptocurrencies, known as altcoins, posted double-digit losses with nearly all crypto assets trading in the red. Large-cap altcoins were seen recording losses between 25% and 40%.
Cryptocurrencies dropped alongside the equities market after the Bureau of Labor Statistics reported that consumer prices for April rose 8.3%, which was slightly higher than expected by economists polled by Dow Jones.
Investors were also affected by the news of LUNA's crash beneath $1 caused by the UST de-pegging. According to CoinGlass, there have been nearly $1.29 billion in liquidations across the crypto market during the last 24 hours.