This Cryptocurrency Critic Identifies a Drop in Tether’s Market Cap! What This Mean For Crypto Market
As worries about contagion risks persist, the cryptocurrency market has been under a lot of pressure recently. This happened after FTX, the second-largest cryptocurrency exchange in the world after Binance, collapsed. The failure of a $32 billion cryptocurrency exchange has brought stablecoins to public attention.
Bitcoin and cryptocurrency critic Peter Schiff took to Twitter and shared some information that he believes is concerning for Tether, the third-largest cryptocurrency and the largest stablecoin. Schiff shared a CoinMarketCap chart of Tether’s market capitalization, which showed a decline.
Look at this chart? It's ominous. #Tether has never seen a collapse in market cap. Given the turmoil in #crypto, one would expect a rise in Tether's market cap as crypto sellers park their cash in Tether. This looks like a run on Tether. If so, a run on #Bitcoin will soon follow. — Peter Schiff (@PeterSchiff) November 18, 2022
He uses the fact that Tether has never experienced a market cap decline as support for his claim.
Why USD₮ Issuances Ensures No Risks from FTX/Alameda — Tether (@Tether_to) November 18, 2022
Even as the outflows increased, the price of Tether drew close to its $1 parity level. On Friday, as cryptocurrencies stabilized, USDT was trading at $0.99.
In order to explain concerns and uncertainties among market participants, Tether’s CTO Paolo Ardoino wrote a thread explaining the connection between FTX and its USDT coin during the FTX crash.
He clarified that while Alameda has issued and redeemed a significant amount of USDT in the past, they do not have any credit exposure that has grown with the troubled cryptocurrency trading company.
The Terra, Celsius, Three Arrows, and most recently, the FTX collapses all contributed to the bear market that has gripped the crypto sector during 2022.Source