The drop in cryptocurrency prices is not the only consequence of this week’s FTX-induced cryptocurrency contagion.
This week’s significant market volatility, induced by the FTX exchange crash, has hit stablecoins, and many of them have temporarily lost their parity.
According to CryptoQuant Senior Analyst Julio Moreno almost all major stablecoins have experienced some level of volatility in their parity this week.
The world’s dominant stablecoin Tether (USDT) temporarily dipped to $0.97 on Nov. 10with refunds on it exceeding $600 million in the past two days, he noted.
CoinGecko reports that USDT remains slightly below par, trading at $0.998 at the time of writing.
Cointelegraph reported on the Tether parity loss incident citing evidence that FTX and sister company Alameda Research were attempting to short USDT.
Crypto market volatility has gone up tremendously in the last few days amid the FTT/FTX downfall.
How are stablecoins doing in this environment?
Tether’s price shortly declined to $0.97 today as redemptions surpass $600M in the last 2 days. pic.twitter.com/52eAtBs3NP
– Julio Moreno (@jjcmoreno) November 10, 2022
The volatility of the cryptocurrency market has increased tremendously in recent days amid the FTT/FTX crash. How do stablecoins behave in this environment? Tether price briefly dipped to $0.97 today as redemptions on it exceed $600M in the last 2 days.
The coin Circle USD (USDC) has also not been immune to volatility, with redemptions on it exceeding $1 billion. The stablecoin dipped very briefly to $0.977 yesterday, but quickly recovered its priceaccording to CoinGecko.
TrueUSD (TUSD) redemptions barely surpassed $1 million, Moreno noted, but that didn’t stop it from trading as low as $0.98 yesterday. The Pax Dollar (USDP) stablecoin dipped as low as $0.96 as redemptions on it reached $100 million, he noted.
There was some volatility for Binance stablecoin BinanceUSD (BUSD) on the Gemini exchange, resulting in a brief drop to $0.98.
The algorithmic stablecoin Tron USDD remains a long way from its parity, currently trading at $0.973, according to CoinGecko. Yesterday it fell as low as $0.952 at the time of maximum volatility.
Concerns about collateral backing the stablecoin are rising as Tron (TRX), which is used to trade USDD, is down 12% since the start of the week. Justin Sun also accused FTX and Alameda of shorting USDD.
The depreciation incidents coincided with a series of stablecoins leaving the FTX exchange on Nov. 10.
FTX Exchange (0x2faf) has resumed transfer out 1 hour ago.
A total of 99 transfers were made, with $4,433,330 stablecoins.
including:
28 transfers of $USDC3,985,236 $USDC in total.
22 transfers of $USDT325,569 $USDT in total.
3 transfers of $BUSD,122,526 $BUSD in total. pic.twitter.com/CdsSG1aWc9— Lookonchain (@lookonchain) November 10, 2022
The FTX exchange (0x2faf) resumed transfer output an hour ago. A total of 99 transfers were made, involving 4,433,330 stablecoins, including:
28 USDC transfers: 3,985,236 USDC in total.
22 USDT transfers: 325,569 USDT in total.
3 BUSD transfers: 122,526 BUSD in total.
At the time of writing this article, most major stablecoins, including USDC, BUSD, USDP, GUSD, and TUSD, had returned to their peg to the US dollar, meaning market participants fearing another Terra-like stablecoin crash can breathe easy again for now.
The markets have slightly recovered from yesterday’s decline, with a 5% gain in total capitalization, which again exceeded $900 billion.
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