Possible Reasons Behind Recent Tether Price Drop

Possible Reasons Behind Recent Tether Price Drop

Today KuCoin temporarily closed deposits and withdrawals of Tether (USDT), which might have caused the stablecoin’s dramatic plunge down to about $0.92. Currently, USDT is on rebound at $0.97 per token, according to Coinmarketcap

According to the official announcement made by KuCoin at 2 AM UTC+0, its users would temporarily be unable to deposit or withdraw USDT due to wallet system maintenance. This news might have started a wave of critique targeted at Tether, particularly its sore spot that never failed to get mentioned — the insufficient audit of collateral reserves.

Another possible cause of the sudden plunge is the rumored delisting of USDT pairs by Binance accompanied by an obviously fake screenshot of Binance’s announcement:

The origin of the rumour and image is unknown but that did not matter and about three hours ago USDT dropped to $0.92, according to Coinmarketcap, which has been the consequence of the massive FUD-fueled sell-off of USDT.

Meanwhile, KuCoin brought back all USDT operations, according to the tweet of about six hours ago (6:11 AM UTC+0), which some Twitter users deemed suspiciously coincidental.

According to reddit user galan77, this Tether plunge was caused by a whale-scale purchase of BTC. For a focused discussion, visit the reddit thread.

OK, I think this was just a whale buying lots of Bitcoin. Of course, if the Bitcoin price goes up by 10%, all USDT pairs pump by 10%, too. So if IOTA is worth 9000 Satoshi, which is $0.5 and Bitcoin goes up by 10%, IOTA is still worth 9000 Satoshi, but then $0.55, so it shows as a 10% pump in the IOTA/USDT pair, while remaining stagnant in its BTC pair. So, this doesn't have to do anything with Tether, just a whale buying lots of BTC. When that happens, USDT pairs always pump, because of math, right?

Reddit user galan77

In the past Tether did have fluctuations of similar magnitude but quickly stabilized. Three months ago USDT reached the all-time high of $1.32. The recent plunge did not go below the all-time low of $0.91 that happened last year in April. Currently, Tether is climbing back at $0.97 per token.

BTC

3,581 USD
0.06%

USDT

1.00 USD
0.00%

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