Largest stablecoin Tether (USDT) briefly depegs as market plummets

The world’s largest stablecoin lost its peg briefly on Thursday amid extremely volatile conditions in the cryptocurrency market. USDT momentarily depegged to $0.95 but has recovered to $0.9921 during the time of writing. 

USDT dropped to $0.95

USDT 1D graph coinmarketcap
USDT 1D graph coinmarketcap

Amid USDT’s slight drop, other major stablecoins such as USDC, BUSD, and DAI, were seen gaining small points to $1.01.

Despite the fact that Tether has previously faced controversy regarding the transparency of its reserves, it continues to be a major part of the cryptocurrency landscape. However, the price fall is the biggest seen since March 2021, raising concerns about an asset that is crucial to the stability of cryptocurrency markets. 

But, USDT’s depeg is less significant compared to TerraUSD (UST), which was the third-largest stablecoin weeks ago. Since this week, UST and its sister crypto, LUNA, have suffered severe losses. Terra’s LUNA token value has fallen 99.9 percent, trading at under $0.03. The network is experiencing a death spiral scenario, putting heavy selling pressure on LUNA, as UST holders can redeem their tokens for $1 worth of LUNA.

Today, terraform Labs released a statement on emergency measures, including one to boost UST minting capacity. 

Terra is working to avoid collapse

The Layer 1 blockchain‘s development firm, Terraform Labs, released a new update Thursday describing several emergency measures it is proposing to avoid total catastrophe.