The largest stablecoin, Tether, has repeatedly been backed by sufficient capital and is operating without issue, but this hasn’t been enough to calm the frayed markets.
Tether’s supply continues to grow, and as of Friday, it made up 65% of the total in the so-called liquidity pool, which enables traders to exchange the top three stablecoins.
Investors remain cautious about holding Tether
Due to greater control over the supposedly backed assets following the early May failure of the Terra USD stablecoin, cryptocurrency investors have grown unhappy with Tether.
Last month, short-sellers raised their rates against Tether, and last week, the stablecoin’s market value decreased by roughly $600 million, bringing its total worth since the TerraUSD fell to about $17 billion.
To keep its one-to-one peg to the currency, Tether depends on a reserve of dollars and assets with dollar equivalents, albeit the reliability of this reserve has frequently been questioned.