(Bloomberg) — Tether, which operates the biggest stablecoin, took to Twitter to reassure crypto markets after the token briefly slipped to the lowest since December 2020.
Paolo Ardoino, Tether’s chief technology officer, said in a tweet that investors can continue to redeem the tokens at a one-to-one value to the dollar. Tether recovered to from an intraday low of 94.55 cents to trade just below 99 cents at 9:13 a.m in London, data compiled by Bloomberg show.
Ardoino added that Tether had redeemed over $300 million in tokens in the last 24 hours “without a sweat drop.”
Tether’s brief dip underscores the unease in crypto markets after algorithmic stablecoin TerraUSD (UST) crashed from its dollar peg, forcing its backers to seek a rescue. While Tether claims to be backed dollar-for-dollar by actual assets, questions about the quality of the assets it holds have persisted.
Hedge Fund Fir Tree Bets Big With Short of Stablecoin Tether (1)
“There may be some stablecoin contagion following UST, however Tether continues to honor 1:1 redeemable ratio on their platform,” Fadi Aboualfa, head of research at crypto custodian Copper, said in an email. “Anyone who was around 2017-2019 and saw massive drops in Tether, and it was really an opportunity to buy at a discount.”
EXPLAINER: What Are Stablecoins? Why Did TerraUSD Go So Wobbly?: QuickTake
(Updates with comment from analyst in final paragraph.)
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