Tether Loses Dollar Peg as Crypto Anxiety Hits No. 1 Stablecoin
- Implosion of TerraUSD stablecoin ripples across market
- Tether says it hasn’t had any problems meeting redemptions
Dominoes are falling in crypto. First it was the collapse of algorithmic stablecoin TerraUSD, sowing turbulence in the broader market. Now its grown-up cousin Tether is wavering from the peg, fueling concern over its status as a place to hide during times of turbulence. While things appear to be settling down for the moment, nobody’s feeling safe.
Tether briefly dropped to the lowest level since December 2020, falling to 94.55 cents from its intended 1-to-1 peg to the dollar on Thursday before recovering to just above 99 cents on reassurances from Paolo Ardoino, Tether’s chief technology officer, that investors shouldn’t have any problems redeeming its tokens at a one-to-one value to the dollar via its platform. Meanwhile, Bitcoin recovered from intraday losses of more than 10% early Thursday to edge higher in the US morning. The world’s largest cryptocurrency traded at about $29,000 as of noon in New York, up about 2% on the day.