Tether (USDT), has seen its market cap fall to $2.11 billion, as roughly $250 million USDT left circulation.
A consequence of recent events that saw the price of Tether decline, reaching a low of $0.8697, followed by an enormous spike in trading volume. Coinciding the fall of Tether’s value, the price of the three biggest cryptocurrencies by market value - bitcoin, ether, and XRP - rose by around 7%.
The circulating supply of the USDT token has been gradually decreasing over the past few days, with nearly 600 million fewer tokens circulating today than last week. The 250 million USDT tokens that recently exited circulation seem to indicate that investors are choosing alternative stable coins.
The Gemini Dollar (GUSD) has been an alternative especially favored by investors, as the demand for the stablecoin created by the Winklevoss led to its price rising to $1.19 yesterday. Other stablecoins such as Paxos Standard (PAX) and Circle’s USDC have also made significant gains in terms of market cap and liquidity.
Uncertainty on part of the investors, rumours that Tether was going to be delisted from several exchanges, and Bitfinex suspending all fiat deposits were the likely catalysts that led to the plummeting of Tether’s market cap. Although the company behind the stablecoin, Tether Limited, claims to have enough reserves to match every USDT token, many in the crypto industry doubt the veracity of the audits made to the firm:
There is concern about Tether and whether it is truly backed by dollars and rumors about USDT (Tether) being delisted from various exchanges
There are also recent reports claiming that Tether has found a new bank in the Caribbean, the Bahamas-based Deltec Bank, where allegedly it is holding the reserves at. It remains to be seen if Tether will be able to recover the thrust of investors and return its dollar pegged value. However, it is important to note that all of the major stable coins have broken their pegs, trading at values higher or lower than $1.