in

What just happened with USDT (Tether)?

I was watching the CoinMarketCap charts when I noticed something very unusual. Around 3 hours ago, it plunged down like a straight line from $1.02 to $1.00

Can anyone explain what happened? I don’t own any USDT but this just seems very odd.

Here is the [chart](https://coinmarketcap.com/currencies/tether/) . Zoom in to 7 days to see what I mean.

Update: It appears USDC (USD Coin) and DAI did exactly the same. Something to do with the US$?



View Reddit by theoakmikeView Source

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

11 Comments

  1. 1. Market crash happens
    2. People and bots (are forced to) quickly selloff their (leveraged) coins for stablecoins
    3. Not enough supply of the stablecoins for the sudden demand -> Price rises above 1 dollar
    4. Stablecoins are pegged to 1 dollar, so people (and bots) can arbitrage by selling the stablecoins and generating new ones for 1 dollar each -> price quicky falls to 1 dollar and arbitraging people and bots just made a few cents profit on every dollar

  2. Here is a great [explanation](https://np.reddit.com/r/CryptoCurrency/comments/mt5odv/explanation_the_recent_crash_was_probably_due_to/) from [u/Fragsworth](https://www.reddit.com/user/Fragsworth/)

    ” *Degenerates on Binance with up to 150x leverage (borrowing Tethers to buy crypto) have been building up their margin account balances to big numbers, and when they make money, they double down, and build even bigger positions. Because they’re degenerates.*

    *But when the price dips below a certain point, some degenerates who have these margin accounts are suddenly below their maintenance limits, and they get liquidated. When they get liquidated, Binance will sell your crypto for Tether, and you are left with little to nothing.*

    *So what happened? Crypto got sold, and Tether got bought. Because Crypto got sold, the price drops, which triggers more accounts, who thought they were safe, to dip below their margin maintenance requirements.*

    *This creates a feedback cycle which basically ends in the liquidation of all the margin accounts. It all ends in a very fast, cascading crash like we just saw. “*

  3. It is quite interesting how Tether went up in price this past day, almost as if they knew they would need more coins for the incoming over leveraged people on BTC.. then the sudden crash was noticed when that happened.

    People knew that crash was going to happen before it did? πŸ™‚

Loading…

0

What do you think?

$7.6 billion USD in longs liquidated in 1 hour as BTCdips below $55K

once power is restored in China expect them all to buy the dip