With crypto markets still under pressure and survivor investors continuing to be forced to liquidate, the market value of the largest stable currency, tether, continues to decline.
Tether’s market value fell to $ 69.1 billion on Friday. It is down from a peak of $ 83.22 billion on May 5, according to CoinMarketCap, and the lowest level since October 2021.
Stablecoins such as tether and Circles USD Coin are designed to maintain a steady value to national currencies and act as dollar substitutes in the crypto markets.
There has been a wave of margin calls across the crypto trading world recently, according to people in the market. In such situations, investors are often forced to sell liquid assets to meet the collateral requirements of their loans.
A margin call is a requirement from a lender for more security from a borrower to support a loan. They usually occur after the value of the original collateral falls below a certain threshold. In that case, the borrower often has to sell another asset to meet the new collateral requirement, or the loan is settled.
There is a reason why the largest cryptocurrencies, such as bitcoin and ether, have been under so much pressure lately: they are the most liquid and easiest to sell quickly. Bitcoin has fallen 34% in the last ten days, according to Dow Jones Market Data. Ether is down 41[ads1]% in this time period.
“Across the board, every cryptocurrency lender makes these calls, and improves its own liquidity,” said Michael Safai, a founder of cryptocurrency firm Dexterity Capital. “I know no one who does not.”
Tether Holdings Ltd., the company that issues and maintains tether stablecoin, did not immediately respond to a request for comment.