- Traders sold Tether’s USDT in droves Thursday on key stablecoin exchange pools on Curve and UniSwap.
- USDT dropped to as low as 99.76 cents and traded slightly below its $1 peg for most of the day.
Crypto traders appeared to ditch Tether’s USDT in droves Thursday in key stablecoin pools on Curve Finance and Uniswap decentralized exchanges, pushing the pools into heavy imbalances.
In the USDT-USDC trading pool on Uniswap, one of the most liquid pairs on the platform, the USDT balance stood at $105.4 million compared to just $6.5 million of USDC.
The current imbalances suggest that investors increasingly prefer to hold DAI or USDC instead of USDT, as there are more USDT sellers in the pool.
The Curve and Uniswap pools are popular venues for traders to swap one stablecoin for another quickly. Most of the time, the tokens are in balance in the pools. Imbalances indicate distress in the markets as investors seek ways to ditch an asset en masse.
Similar imbalances happened during Terra’s implosion in May 2022 and this March when the Silicon Valley Bank crisis hit the USDC issuer Circle.
"Isn't it interesting that USDt is being pressured down (slightly, within 10bps, just to push market makers to react), and USDc, the main competitor that you would expect being gaining from the situation, is redeemed heavily nevertheless, while suddenly a competitor born 2 days ago is getting it all?," he posted. "It feels definitely organic and not manipulative at all."
The market capitalization of FDUSD mushroomed to $258 million from $20 million in the last two days, according to CoinMarketCap.
UPDATE (August 3, 2023, 19:29 UTC): Adds background about imbalances.
UPDATE (August 3, 2023, 21:35 UTC): Adds Tether CTO comment and context about FDUSD and Binance.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.