According to the rumors, hedge funds have been opening short positions on Tether (USDT) and have been actively seeking to create panic in the crypto industry to affect the stablecoin. Peg 1:1 to the value of the U.S. dollar, these entities might be trying to replicate the events that crash LUNA and UST.<\/p>\n
These digital assets were at the epicenter of the Terra ecosystem, the latter operated as an algorithmic stablecoin pegged to the U.S. dollars until it crashed losing over 90% of its value. According<\/a> to Ardoino, hedge funds might try to profit by creating the conditions for a similar crash with USDT:<\/p>\n I have been open about the attempts from some hedge funds that were trying to cause further panic on the market after TERRA\/LUNA collapse. It really seemed from the beginning a coordinated attack, with a new wave of FUD, troll armies, clowns etc.<\/p><\/blockquote>\n The outcome would be different, as Tether\u2019s CTO explained, these hedge funds would allegedly try to trigger a massive capital outflow from the stablecoin and destabilize its price. Ultimately, if the price of USDT drops, the short players would \u201cbuy back tokens at a much lower price\u201d.<\/p>\n These entities, Ardoino said, have been allegedly spreading Fear, Uncertainty, and Doubt (FUD) on the stablecoin, such as the rumors that claim Tether is not 100% backed by real assets, and that it was exposed to fail investments. The Tether CTO denied once again denied the rumors:<\/p>\n Tether had\/has in fact >= 100% of the backing, never failed a redemption and all USDt are redeemed at 1$. In 48 hours Tether processed 7B in redemptions, averaging 10% of our total assets, something almost impossible even for banking institutions.<\/p><\/blockquote>\n In that sense, Ardoino put into question the \u201cbillions\u201d in short positions taken by these hedge funds. The executive claims USDT is a battle-tested stablecoin that has outlasted several crypto bear markets, and even companies considered \u201cthe holy heroes of our industry\u201d.<\/p>\n As Bitcoin and the crypto market trend to the downside, Tether’s (USDT) total market capitalization saw an almost 20% drop. However, the stablecoin operates with a very different mechanism than that of Terra\u2019s LUNA-UST and seems unlikely to follow the same path.<\/p>\n USDT has always caused controversy in space, but it has operated for almost a decade. The company behind the stablecoin has been improving on its government contacts, its transparency, and adding more assets to back USDT.<\/p>\n Related Reading |\u00a0<\/strong>TA: Bitcoin Dips Could Be Limited, Why 100 SMA Is The Key<\/a><\/strong><\/p>\n As a pseudonym analyst said on Twitter, this doesn\u2019t mean the stablecoin could never fail, but it does seem to suggest the \u201cFUD on USDT seems overrated\u201d.<\/p>\n The majority of Tether clients (based on USDT issuance amount) are well-known market makers and trading firms such as @AlamedaResearch<\/a>, @CumberlandSays<\/a>, @jump_<\/a>, etc. <\/p>\n 89.5% of total USDT issuance was sent to market makers of Big CEX such as Binance, FTX, OKX, Bitfinex, etc. pic.twitter.com\/qQ4DHAIfuF<\/a><\/p>\n — alphanonce Intern (@alphanonceStaff) June 22, 2022<\/a><\/p><\/blockquote>\n![\"Crypto](\"https:\/\/uniquehot.com\/wp-content\/uploads\/2022\/06\/Crypto-total-Tether-USDT.png?resize=860%2C376\")
Can Tether Follow LUNA\/UST And Lose Its Pegged?<\/h2>\n
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