More than $1.6 billion in Tether (USDT) tokens was cashed out in less than two days, and it has market analysts wondering whether Tether is in serious trouble right now.
A Huge Market Pullout
The world’s biggest stablecoin, Tether, is under new scrutiny. This time, it’s not because of questions about where its backing is coming from but whether it can survive the latest mass token cash-out.
As the cryptocurrency market plunges, investors are starting to get worried, and some of that fear is manifesting as investors pull their investments out of Tether in a big way. We saw a similar mass exodus on this scale a few weeks ago when $7 billion was withdrawn from Tether accounts, presumably cashed out completely.
At that time, the market wasn’t in as bad of a place as it is now, but it is worth considering if Tether can even survive major losses of investments like this in such a short window.
We saw the collapse of UST not long ago, and that has had a major effect on the stablecoin market in particular, and now this. What does it mean for Tether?
Is Tether on Its Final Days?
It’s far too soon to call the end of Tether just yet, especially since the rate is still holding steady at $0.999 (USDT/USD). Tether has proven to be a safe port for investors who want to store their crypto assets somewhere on the crypto market when riskier tokens are fluctuating. With the market dropping rapidly to lows we haven’t seen in years, it looks like many investors are just dropping out completely, taking their investments elsewhere and trying to salvage what they can.
Because UST collapsed very recently, there are people comparing its demise to what is happening with Tether, but the two have very different financial structures. We probably won’t see a complete collapse of Tether anytime soon, but these recent withdrawals are cause for concern, to be sure. Even the stablecoins are starting to look unstable as the market continues its fall.