Problems with the cryptocurrency exchange FTX and Alameda Research created a general negativity in the market. The bitcoin and altcoin market has dropped to yearly lows. But the leading stablecoin Tether (USDT) affected by this negative mood, it lost its 1 dollar fixed. So what is the reason for the developments? Here are the details that emerged.
Investors of fear, uncertainty and doubt cryptocurrency led to its removal from the market. However, just before disclosed Better-than-expected US inflation data brought some recovery. As a result, there was a slight improvement in the markets.
October 2022 annual in the United States #inflation rate was 7.7 percent.
— KoinFinans (@KoinFinans) November 10, 2022
Despite this recovery, Tether price problems continue to scare. Koinfinans.com As we have previously reported, there was a similar atmosphere of panic in the Terra (LUNA) collapse.
USDT it was also depeg for $0.09989. Soon after, the circulating supply decreased by 3 billion, which allowed the stablecoin to return to $1.
However, this situation was very short lived and the increase in supply increased very sharply. As a result, the 1 dollar constant started to decline again.
As seen in the chart above, USDT declined below $0.95. Also, a large amount of USDT was bought and the decrease in supply drove the price up significantly. But in the current situation, the bears have capitulated in the market and the selling volume has intensified. As both events are correlated, speculation that Alameda Research is shorting USDT has been on the agenda.
Are Tether (USDT) Assets Safe?
Somehow the entire market still seems to be in the grasps of Alameda
1. Shorting USDT (https://t.co/NBmoqaU64R)
2. Maybe $300m being moved from FTX to Nance? (https://t.co/L0MP1OoQIV)
3. LEFT unlock
— Hsaka (@HsakaTrades) November 10, 2022
The analyst reported that the USDT short was made by Alameda Research by procuring USDC through AAVE and borrowing USDT. Also, the platform traded USDT to USDC on Curve and this transaction was recorded on Etherscan.
If the speculation turns out to be correct, Tether reserves will need to burn more USDT from their treasury than before.
Tether CTO Paolo Ardoino announced this morning that $700 million redemptions have been processed in the past 24 hours.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.