Tether (USDT) Drops Below One Dollar As Team Announces Chain Swap
2022.05.12 16:46
Tether (USDT) Drops Below One Dollar As Team Announces Chain Swap
- Tether has dropped against the U.S. Dollar slightly — causing a bit of a de-peg to the fiat currency.
- According to the crypto market tracker, CoinMarketCap, the price of Tether (USDT) currently stands at $0.9852.
- The reasons for USDT losing its peg to the dollar slightly are not clear.
The largest cryptocurrency stablecoin by market cap, Tether, has dropped against the U.S. Dollar slightly — causing a bit of a de-peg to the fiat currency. According to the crypto market tracker, CoinMarketCap, the price of Tether (USDT) currently stands at $0.9852. The reasons for USDT losing its peg to the dollar slightly are not clear.
USDT could be feeling a bit of market pressure seeing that Terra USD (UST) was unable to maintain its peg. The slight dip could also have something to do with Tether’s recent announcement that they will be using a 3rd party to perform a chain swap — an event where a crypto shifts from one blockchain to another.
According to a tweet made on Tether’s official Twitter (NYSE:TWTR) page, Tether will work with a 3rd party to perform a chain swap. The chain swap will see 1 billion USDT converted from the Tron (TRC20) chain to the Ethereum (ERC20) chain, and then 20 million USDT converted from the Tron chain to Avalanche.
According to the post, the total supply of Tether (USDT) “will not change during this process”.
It did not take long for the crypto community to question the motive behind the chain swap. Many members of the community cited their fear that the fate of the stablecoin may follow that of USTs.
However, it could just be that Tron does not want 2 large stablecoins on the same chain, seeing that their USDD stablecoin (cryptocurrency issued by Tron) is gaining traction in the market. The Tether team could also not want to share the Tron chain with USDD for potential congestion prevention.
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