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Tether has been at the top of the stablecoin pyramid for quite a long time and has gathered several competitors in the market. The fall of the stablecoins began soon after UST, an algorithmic stablecoin that powered the Terra protocol, lost its peg to the US dollar and crashed with its sister coin Terra LUNA. Panic-stricken investors soon started to pull out as the market crash intensified. Currently, experts speculate that Tether may also follow TerraUSD as several misconceptions and rumors are bringing down its market dominance.
According to reports, stablecoin issuer Tether is facing complex problems as the crypto firm is busy denying claims that its commercial paper portfolio is 85% backed by Chinese or Asian commercial paper. Tether executives have demonstrated that these claims are entirely false and are likely inducing further panic in order to generate additional profits from an already tumultuous market. They have also said that there was no exposure to the CeDeFi platform Celsius and crypto hedge fund Three Arrows Capital.
Based on the rumors that the company later denied. USDT's commercial paper portfolio consisted of nearly 90% Chinese and other Asian securities and traded at a 30% discount due to the current market conditions. Tether executive, Paolo Ardoino has denied these claims and called them an attempt to create panic and fear in the market. Besides this, USDT has also claimed that Celsius' stature has been liquidated after the crypto lender's freezing of account withdrawals on Monday an aftereffect of the sharp slide in the crypto market.
Tether's approach will always speak in favor of USDT. According to some expert investors, Tether might not dive as low as TerraUSD based on some rumors. But the actual concerns are about how the investors would react amid these volatile market conditions. Investors are currently looking forward to the detailed information on Tether's reserves being published. As these expectations enrich fear and anxiety, investors continue to step back and are moving towards more centralized forms of assets.
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