Whales have recently been offloading substantial amounts of Tether (USDT), the largest stablecoin in the crypto market, causing a surge in its dominance within the Curve 3pool liquidity pool. This unusual influx has raised concerns about the stablecoin’s stability and sparked apprehension regarding potential USDT depegging.
The recent whale sell-off has significantly impacted the composition of the Curve 3pool, with USDT now making up 73.17% of the liquidity pool and over 13% each. This is the highest level since November 2022, during the time of the FTX collapse. Miles Deutscher took to Twitter to share these concerns, pointing out the sharp increase in USDT inflows. It remains unclear whether this development is simply due to market fear, uncertainty, doubt (FUD), or if there is insider knowledge driving these actions.
Much of the scrutiny towards USDT comes from its de-peg in the wake of the Terra crash. CoinGape reported on May 12, 2022, that the token is down 4.8% to $0.9508 – its lowest point since the 2017 crypto crash. Additionally, on June 6, 2022, Tether experienced a significant depegging event, trading at $0.18 per USD Coin (USDC) on ValleySwap.
Blockchain explorer Lookonchain has identified specific addresses associated with the pump-and-dump activities surrounding USDT. One notable player in the USDT depegging scenario is CZSamSun, who reportedly shorted USDT on Aave V2 after its depegging. CZSamSun borrowed a significant amount of USDT, specifically 31,544,278 USDT, from Aave V2 and exchanged it for 31,475,408 USDC at a rate of $0.9978. Moreover, CZSamSun deposited 10 million USDC back onto Aave V2, hinting at a calculated strategy to take advantage of the depegging situation.
The recent offloading of USDT by whales and the subsequent impact on the Curve 3pool raise fresh concerns about Tether’s long-term stability and trustworthiness. However, Tether is currently trading at $0.9973, only experiencing a slight 0.25% decrease in value over the last 24 hours. With a market capitalization of approximately 83 billion, USDT remains one of the largest and most widely used stablecoins in the cryptocurrency market.
While skeptics may be questioning the motives behind whale sell-offs, it’s essential for market participants to conduct thorough research before making any investment decisions. As these events unfold, investors should carefully monitor developments and consider the potential impacts on USDT’s stability and standing in the broader crypto market.
Source: Coingape
