The Cryptos News | Daily Bitcoin News
  • Home
  • News
  • Market Cap
  • Top Cryptos
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
    • Cardano (ADA)
    • Solana (SOL)
    • Tether (USDT)
    • XRP (XRP)
    • Polkadot (DOT)
    • Dogecoin (DOGE)
    • USD Coin (USDC)
  • Prices
  • Wallet
  • Crash
  • Investment
  • Exchange
  • Mining
  • Trading
  • Home
  • News
  • Market Cap
  • Top Cryptos
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
    • Cardano (ADA)
    • Solana (SOL)
    • Tether (USDT)
    • XRP (XRP)
    • Polkadot (DOT)
    • Dogecoin (DOGE)
    • USD Coin (USDC)
  • Prices
  • Wallet
  • Crash
  • Investment
  • Exchange
  • Mining
  • Trading
The Cryptos News | Daily Bitcoin News
No Result
View All Result
Home Trading

Crypto volatility knocks more stablecoins off their peg

Crypto volatility knocks more stablecoins off their peg
Share on FacebookShare on Twitter


Smartphone with Tether logo is placed on displayed U.S. dollars in this illustration taken, May 12, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Register now for FREE unlimited access to Reuters.com

June 16 (Reuters) – Major cryptocurrency volatility has hit stablecoins, typically considered the market’s safer-havens, with investors pulling money out of the sector and several losing the peg to their underlying assets.

The market capitalization of stablecoins had plummeted to $156.8 billion on Thursday, from around $181 billion at the start of May, CoinGecko data showed.

Tether , the world’s largest stablecoin, briefly dropped to $0.993 on Wednesday, though it quickly regained parity with the dollar.

Register now for FREE unlimited access to Reuters.com

“Stablecoin market cap goes hand in hand with sentiment and liquidity in crypto markets, and it’s slightly worrying that USDT appears to see another round of liquidations,” crypto digital asset manager IDEG wrote in a note.

Digital asset markets are facing a perfect storm, reeling after crypto lender Celsius froze withdrawals and transfers between accounts on the heels of last month’s demise of the terraUSD stablecoin, as well as global tightening of monetary conditions making riskier assets such as cryptocurrencies less attractive.

Stablecoins are crypto tokens pegged to the value of mainstream assets such as the dollar, and are the main medium for moving funds across digital tokens or into cash due to their lower volatility.

They are also the target of funds that arbitrage between exchanges and geographies, and try to bet on stablecoins that are quoted marginally below par regaining their parity.

Worries over reserves-backed Tether’s exposure to Celsius, as well as ongoing concerns about its reserve assets, have seen it lose more than $5 billion in market cap in the past 30 days.

“There is some recognition they (Tether) are going to have some bad loans because of Celsius,” said Joseph Edwards, head of financial strategy at crypto firm Solrise Group.

However, “Tether’s market cap is still above $70 billion and these things are like a drop in an ocean”, he added.

For its part, Tether said any loans to Celsius were overcollateralized and that worries about the make-up of its commercial paper reserves were being fuelled by “false rumours”.

ALGORITHMIC STABLECOINS ALSO HIT

A number of algorithmic stablecoins – which, similar to terraUSD, use complex mechanisms to control token supply and maintain their peg to the underlying asset – have also taken a hit.

USDD, the algorithmic stablecoin of smart contract platform Tron and the ninth-largest stablecoin by market cap, lost its peg to the dollar on Monday, at one point dropping as low as $0.96 as short-sellers built up extreme positions against the cryptocurrency, according to researcher CryptoCompare.

Tron founder Justin Sun promised to deploy more than $2 billion to defend the stablecoin’s peg.

“I don’t think they can last for even 24 hours. Short squeeze is coming” he tweeted on Monday. Sun did not respond immediately to a request for comment.

The Tron DAO, which manages reserves for the stablecoin, said on Wednesday it would remove 2.5 billion of its tron tokens off the Binance crypto exchange to help bolster USDD. However, USDD has yet to regain its peg and is trading at $0.976.

Other algorithmic stablecoins have also faced de-pegging in the past few weeks, including the Frax stablecoin, which has since recovered, and the Neutrino USD ,which dropped as low as $0.93 on Wednesday and is still trading under the dollar at $0.966.

Still, these stablecoins are much smaller in size than Tether, or even terraUSD at its peak.

“There are depegs in algoriththmic stablecoins again but those keep happening over and over… if something bad were to happen to them it wouldn’t represent any fracture for the ecosystem in the way Tether would have done,” Edwards said.

One potential winner of the current turmoil is USD Coin, backed by reserves of cash and U.S. Treasury notes, which has seen its market cap steadily climb to more than $54 billion from $52 billion over the past month even as other stablecoins struggled.

Register now for FREE unlimited access to Reuters.com

Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru;
Editing by Vidya Ranganathan and Alex Richardson

Our Standards: The Thomson Reuters Trust Principles.



Read More:Crypto volatility knocks more stablecoins off their peg

Tags: BISVBISV08CRYCURcryptoEF:BUSINESS-FUTURE-OF-MONEYFINFINSFINS08FINTEFRXFTECHFUNDknocksPegstablecoinsTechTECH08TMTTOPNWSVolatility
Previous Post

New Political Fundraising Platform For Bitcoin, Crypto Set To Launch In July

Next Post

The EV revolution could spur a used car catastrophe abroad

Related Posts

CoinFLEX: Amid liquidity crisis, the cryptocurrency exchange had this to say

CoinFLEX: Amid liquidity crisis, the cryptocurrency exchange had this to say

by The Cryptos News
July 30, 2022
0

In a recent announcement dated 29 July, co-founders of CoinFLEX, Sudhu Arumugam and Mark Lamb, provided an important update....

SEC Chairman Publishes Video Outlining Plan to Regulate Crypto Trading Platforms –

SEC Chairman Publishes Video Outlining Plan to Regulate Crypto Trading Platforms –

by The Cryptos News
July 30, 2022
0

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has published a video explaining how the...

Analysis | Why the Crypto World Flinches When the SEC Calls Coins Securities

Analysis | Why the Crypto World Flinches When the SEC Calls Coins Securities

by The Cryptos News
July 29, 2022
0

Comment on this storyCommentCryptocurrency traders have been put on notice that the US Securities and Exchange Commission considers a...

FTX wins full approval to operate crypto exchange in Dubai

FTX wins full approval to operate crypto exchange in Dubai

by The Cryptos News
July 29, 2022
0

Representations of cryptocurrencies in this illustration taken, January 24, 2022. REUTERS/Dado Ruvic/Illustration/File PhotoRegister now for FREE unlimited access to...

Next Post
The EV revolution could spur a used car catastrophe abroad

The EV revolution could spur a used car catastrophe abroad

Subscribe
Login
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Trending News

Payperless Crypto Wallet announced working on NFT tokens support

Payperless Crypto Wallet announced working on NFT tokens support

June 25, 2022
June’s Red-Hot Inflation Report Rattled Bitcoin and Ethereum Prices. What That Means for

June’s Red-Hot Inflation Report Rattled Bitcoin and Ethereum Prices. What That Means for

July 14, 2022
Ripple’s Counsel Urges US Lawmakers to Urgently Pass ‘Sensible’ Crypto Legislation Amid

Ripple’s Counsel Urges US Lawmakers to Urgently Pass ‘Sensible’ Crypto Legislation Amid

July 30, 2022
ADVERTISEMENT

Investment

Buying Bitcoin on the Dip? 3 Things the Smartest Investors Know About Crypto | The Motley

Buying Bitcoin on the Dip? 3 Things the Smartest Investors Know About Crypto | The Motley

July 30, 2022
Study up and become a more informed crypto investor with this bundle

Study up and become a more informed crypto investor with this bundle

July 30, 2022
Crypto Exchange KuCoin Launches NFT ETFs By Benzinga

Crypto Exchange KuCoin Launches NFT ETFs By Benzinga

July 30, 2022
Is It Right Time To Invest In Crypto Market? Crypto Expert Shares Bullish Indicator

Is It Right Time To Invest In Crypto Market? Crypto Expert Shares Bullish Indicator

July 29, 2022
$ETH-Based Investment Products Leading Bounce-Back in July, Says CryptoCompare Research

$ETH-Based Investment Products Leading Bounce-Back in July, Says CryptoCompare Research

July 29, 2022

Prices

Latest Report Shows Cryptojacking Increased By 30% During The Crypto Slump

Latest Report Shows Cryptojacking Increased By 30% During The Crypto Slump

July 30, 2022
Tron price prediction as Unifi Protocol TVL explodes

Tron price prediction as Unifi Protocol TVL explodes

July 30, 2022
Bitcoin and Ethereum Prices Are As High As They’ve Been Since June Crypto Crash, But

Bitcoin and Ethereum Prices Are As High As They’ve Been Since June Crypto Crash, But

July 30, 2022

Crypto Flipsider News – Crypto Market Rally; Nirvana (NIRV) Exploited; Vasil Delayed;

July 29, 2022

Trading

CoinFLEX: Amid liquidity crisis, the cryptocurrency exchange had this to say

CoinFLEX: Amid liquidity crisis, the cryptocurrency exchange had this to say

July 30, 2022
SEC Chairman Publishes Video Outlining Plan to Regulate Crypto Trading Platforms –

SEC Chairman Publishes Video Outlining Plan to Regulate Crypto Trading Platforms –

July 30, 2022
Analysis | Why the Crypto World Flinches When the SEC Calls Coins Securities

Analysis | Why the Crypto World Flinches When the SEC Calls Coins Securities

July 29, 2022
FTX wins full approval to operate crypto exchange in Dubai

FTX wins full approval to operate crypto exchange in Dubai

July 29, 2022
Crypto exchange Zipmex files for bankruptcy protection in Singapore

Crypto exchange Zipmex files for bankruptcy protection in Singapore

July 29, 2022
  • About Us
  • Contact Us
  • Terms of Use
  • Privacy Policy
  • DMCA

© 2021 Thecryptosnews.com

No Result
View All Result
  • Home
  • News
  • Market Cap
  • Top Cryptos
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
    • Cardano (ADA)
    • Solana (SOL)
    • Tether (USDT)
    • XRP (XRP)
    • Polkadot (DOT)
    • Dogecoin (DOGE)
    • USD Coin (USDC)
  • Prices
  • Wallet
  • Crash
  • Investment
  • Exchange
  • Mining
  • Trading

© 2021 Thecryptosnews.com

wpDiscuz