Stablecoins depegged, Tether remains the king of all stablecoins

• 1 The market has witnessed a collapse in the stablecoins.
• 2 All the stablecoins have depegged except Tether.

Some stablecoins observed their value drop from their pegged value; meanwhile, USDT stood still. Over the past few weeks, markets have shown high volatility. In the first week of March, one of the banking partners of crypto Silvergate filed for voluntary liquidation, and announced to cease its operations. After the shutters went down on the Silvergate, the crypto market witnessed a bear army taking over the coins. 

Amid Silvergates’s meltdown, reports dated March 10, 2023, about  Silicon Valley Bank being taken over by the US regulators created a tsunami of fear among the investors. The Silicon Valley Bank halted all the withdrawals made by its clients, and two days after announced acquisition by the US regulators. 

Crypto-supporting banks are facing a massive setback. Crypto-partnered banks, including Silvergate and Silicon Valley, are being shut down. Meanwhile, others like Signature Bank, First Republic Bank and PacWest Bank Corporation are facing a fall. 

Tether last standing stablecoin

The Silicon Valley Bank is attributed as the largest failure of American Banks after the 2008 fall. This shutdown casted a dark shadow over the stablecoins. All stablecoins witnessed depegging except for Tether. Stablecoins that are fiat-pegged are meant to be pegged as 1:1 with the US dollar. 

The Approx valuation of stablecoins after the Silicon crises.

USDT

USDT is issued by HongKong based company Tether. It was founded by Brook Pierce, Reeve Collins, and Craig Sellar in 2014 and is pegged with USD. The USDT witnessed a spike followed by a correction, to maintain its value at $1.

USDC

USDC has two founding members, Circle and Coinbase exchange. USDC, one of the largest stablecoins, has faced a massive push. 

USDD

USDD is a cryptocurrency issued by TRON DAO.it runs on incentive mechanism and responsive monetary price that allows it to self-stabilize the price. TRON’s stablecoin USDD witnessed a drop due to turbulent markets. The drop was not very drastic, but brought down the value below $1.

DAI

DAI is an Ethereum-based stablecoin developed and managed by Maker Protocol and Maker Dao. It is soft-pegged to the US dollar and is collateralized by several other cryptocurrencies. The collateralized cryptos are deposited into smart-contract vaults on each minting of DAI. The value of DAI saw high volatility due to its mixed mechanism. 

Conclusion

All stablecoins but Tether, witnessed depegging and are currently at a value below $1. The market pattern shows Tether’s mechanism to be near to perfect. The value of USDT is self-adjusting and is majorly stable. 

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Nancy J. Allen

Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.