- USDT has been depegging since 4 August.
- The stablecoin has maintained its market cap despite the depeg.
Since 4 August, Tether [USDT] has been in the throes of a depegging event. According to Messari, this marked the first instance of a sustained deviation from its peg since the FTX saga. As of this writing, USDT hovered around 0.99.
Source: Messari
However, it’s imperative to acknowledge that this detachment doesn’t loom large, and the assurance of a 1:1 redemption has endured. Ergo, each USDT still commanded an exchange value of $1.
Curiously, the rationale behind this depeg remained elusive. Noteworthy, though, is the recent ingress of newcomers into the stablecoin space. The advent of First Digital USD [FDUSD] made waves weeks ago, then PayPal USD [PYUSD] was announced on 7 August, amplifying the intrigue.
Normal USDT exchange flow persists
As illustrated by Glassnode’s exchange flow chart, the aftermath of the depeg has had no significant impact on the flow dynamics. However, the flow has skewed towards outflow, with a prevailing trend of USDT moving out of exchanges.
Source: Glassnode
However, the tide had turned as of this writing, with a positive flow dominating. Nearly 170 million USDT had flown into various exchanges to turn the tide of the flow into a positive one.
Furthermore, Santiment’s insights offer an additional layer to the unfolding narrative. Historically, when major USDT depeg incidents took center stage, a surge in Age Consumed metric ensued—a phenomenon indicating the activation of long-dormant coins within the blockchain.
However, no major movement has been noticed this time around. This indicated that there was no movement by traders to capture some arbitrage.
Source: Santiment
Tether maintains dominance
Tether has become accustomed to the ebb and flow of depeg incidents, often accompanied by the swirling Fear, Uncertainty, and Doubt (FUD) that follows in its wake. Despite this recurring pattern, it has unwaveringly held its ground as the top stablecoin regarding market capitalization.
Even as of this writing, it retained its throne, as evidenced by data from CoinMarketCap. Its market capitalization was over $83 billion at press time, a significant figure casts a long shadow over its closest contender, USD Coin [USDC], which sat at $26 billion.
