Tether, the world’s largest stablecoin, has regained its face value of $1 in just one day after a sudden drop to $0.95 and a $3 billion drop in sales.
Today, the stablecoin is trading at a face value of $1, showing investors that their fears of a chain reaction in the cryptocurrency market are unfounded – the only casualty was the unsecured TerraUSD, whose value was backed by the Luna cryptocurrency issuance algorithm. which fell from $85 to $0.005 in a week. Tether, in turn, is backed by cash and short-term bonds equal to the tokens issued.
Stablecoins are viewed by crypto investors as an analogue of bank assets protected from volatility – a significant portion of bitcoin trading is conducted in tether. Now the turnover of the cryptocurrency is $79.5 billion, a day ago it was $82.9 billion. Thus, in just one day, the company servicing the project has assets worth more than $3 billion Dollars redeemed. Tether CTO Paolo Ardoino said all requests were processed as quickly as possible through the company’s banking channels. Amounts in the applications ranged from $100,000 to $600 million.
Investors have long doubted Tether’s ability to provide cash for the tokens, and involving the New York State Attorney General, it was determined that the company’s reserve contained commercial paper – short-term unsecured debt. The company has promised to reduce its stake and currently 52% of the funds are in short-term US Treasury bills – by the next financial report on reserves this number will increase.