Tether Drowns Less than $1 in a Nightmare Scenario for Bitcoin

A Bitcoin sign is seen on a Coinstar ATM during the Bitcoin 2022 conference at the Miami Beach Convention Center on April 8, 2022 in Miami, Florida.

A Bitcoin sign is seen on a Coinstar ATM during the Bitcoin 2022 conference at the Miami Beach Convention Center on April 8, 2022 in Miami, Florida.
picture: Marco Bello (Getty Images)

The cryptocurrency market has continued to do so money bleeding Thursday, with the most popular coins declining by double in the last 24 hours. And nobody ever knows when things will end, as many people worry that the entire market for fake digital money could go to zero as the stablecoin Tether officially traded below $1 for the first time ever early Thursday.

Bitcoin, the world’s most popular cryptocurrency, is down 11.2% over the past day and is currently at $27,959 – nearly 58% below its all-time high of $69,000 in mid-November. Ethereum has struggled worse over the past 24 hours, dropping 19.9% ​​to $130.

The culprit in the crypto bloodbath was a chain reaction that began over the weekend when Terra’s stablecoin, TerraUSD, which is theoretically supposed to stay at $1, became “unbundled” and began trading at less than a dollar. This sent shockwaves through the crypto community, as stablecoins are supposed to be backed by real assets and not just monopoly money. At least that was the promise, although investigative reporters found it was all just a game smoke and mirrors.

Tether, the world’s most popular stablecoin, was also unpegged for the first time early Thursday, dropping to $0.95 on major exchanges before recovering slightly to $0.98 as of this writing. But even at $0.98, the utility of the stablecoin has been completely obliterated as it is not exactly worth $1, causing speculators to rush out and try to make money by buying Tethers at a cheaper price assuming they can be sold for $1 later. And this is exactly the kind of volatility that you already have with cryptocurrencies and it does not help people who are looking for a safe haven asset that can be used more easily to convert to cryptocurrencies.

Tera colorthe world’s fourth most popular cryptocurrency as of Monday morning, dropping to nearly zero during the past 24 hours. The world’s largest cryptocurrency exchange, Binance, Remove currency from the list as a response. Currently trading at less than $0.01The cryptocurrency was worth over $87 just a week ago, and $54 early Monday. Stories have surfaced on social media sites like Reddit about people losing her completely life savings In Luna’s breakdown, though, Gizmodo hasn’t been able to independently verify any of these stories yet.

Other cryptocurrencies are also down, as BNB is down 18% in the past 24 hours to $254.45, XRP (Ripple) is down 28% to $0.36, Cardano is down 32% to $0.44, and Solana is down 33% to 43.14. dollars. Dogecoin, the funny prank coin that turned into a serious investment, is down 29% over the past day to $0.07.

As we explained on Monday, if you invest $100 in any of the most popular cryptocurrencies six months agoYou have lost a large amount of money. And if you listened to Matt Damon during his Super Bowl commercial for Crypto.com insisting that “wealth favors the brave,” you’re probably fighting back.

For its part, Tether released a statement early Thursday insisting that everything is fine, something you just have to take their word for as they have never been scrutinized.

“Tether has remained stable through numerous black swan events, highly volatile market conditions, and even in its darkest days Tether has never failed to honor a refund request from any of its authorized customers. Tether will continue to do so, which it has always been its practice,” Tether said in a statement. Online.

“Tether is the most liquid stablecoin on the market, backed by a strong and conservative portfolio consisting of cash and cash equivalents, such as short-term Treasuries, money market funds, and commercial paper holdings from issuers rated A-2 and above. The value of the Tether is being published,” the statement continued. Tether reserves daily and updated once daily.

Again, you’ll only have to take Tether’s claims to faith because its operations are pretty much a black box for regulators.

As cryptographic expert Ben McKenzie points out, on TwitterThere are a few things to look out for as the crypto market crashes. First of all, look for exchanges to suddenly stop letting people withdraw funds in the name of “scheduled maintenance,” something that US Binance already announced overnight will happen this morning from 6:00 a.m. to 9:30 a.m. ET.

“While these scams are fun (and profitable for adults) when the price goes up, when the price goes down everything tends to fall apart. You, dear regular casino sponsor, are not at the forefront of their ideas…” MacKenzie chirp.

But that’s just one expert’s opinion. How low can the cryptocurrency go? Again, no one can say for sure. But if you are looking for some cheap cryptocurrency, you better wait at least to see what happens with Tether in the coming days and weeks. Experts like McKenzie have warned that a Tether crash could lead to an entire Bitcoin devaluation no thing. We may now be able to see if this theory will ever die.

9:02 a.m. ET: Updated with a statement from Tether.

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