USDT Suffers Depeg Due to Sell-off on Curve and Uniswap

On-chain data shows that crypto traders appeared to sell off Tether’s USDT yesterday in key stablecoin pools on Curve and Uniswap. Shortly after, USDT fell to $0.9976 and lost its $1 peg for a long time. In other words, many traders have ditched or sold USDT, therefore, the tokens are in balance in the pools. The USDT balance has now skyrocketed to 59.3% in Curve 3pool, including USDT, USDC and DAI, while USDC and DAI account for only 20.7% and 20% of total assets in the pool.

At the same time, the USDT-USDC pool on Uniswap, one of the most liquid pairs on the platform, also recorded the USDT balance at $103.12 million, while USDC occupied only $8.7 million.

Data shows that investors currently prefer holding  DAI and USDC than USDT. Under selling pressure, USDT lost its peg, the intraday low of $0.9966 on CoinMarketCap. At the time of writing, USDT has not yet recovered to its $1 peg.

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The liquidity pools on Curve and Uniswap are popular places for traders to swap one stablecoin for another. Most of the time, the tokens are balanced in the pool. The imbalance indicates distress in the markets as investors seek ways to ditch an asset en masse.

Right after USDT suffered depeg, Paolo Ardoino – Tether’s CTO hinted that USDT was being foul played. In the comments section, netizens also expressed suspicion that it is Binance and CEO Changpeng Zhao (CZ) who are behind the USDT’s depeg. 

“A competitor born 2 days ago” cited in the post could be FDUSD – new stablecoin of Hong Kong-based First Digital. The exchange has listed and free to trade FDUSD pairs on July 26. In the past two days alone, the market cap of FDUSD has spiked from $20 million to $258 million.