- USD Tether CTO Paolo Ardoino says “price discrepancy” to blame for alleged USDT depeg.
- Ardoino believes USDT depeg is a glitch, the stablecoin trades within 10 bps of parity on Binance and Coinbase.
- Tether assured traders of no exposure to FTX or Alameda after USDT slipped below its $1 peg.
USD Tether (USDT) momentarily depegged from the US Dollar according to data from Coinbase and CoinMarketCap. The stablecoin exchanged hands at $0.96 before recovering to the $0.99 level.
USD Tether CTO Paolo Ardoino labeled the event “a glitch”, but experts in the crypto community believe USDT suffered a depeg caused by shockwaves from the FTX native token FTT’s implosion and the subsequent crypto market crash. In the end it appears CoinGecko has taken responsibility for the pricing discrepancy, putting it down to a data issue.
USD Tether suffers temporary depeg
USD Tether exchanged hands for as low as $0.96 before bouncing back to $1.01, based on price data from CoinGecko and CoinMarketCap. Paolo Ardoino, Tether’s CTO, considered this event a glitch on crypto data aggregator platforms. However, in light of recent developments in crypto, FTT’s collapse and Binance’s plan to acquire FTX, experts believe the event was a depeg.
USDT, the biggest stablecoin, crumbled under rising pressure from the bearish crypto market and traders pulling funds from riskier assets like Bitcoin, and cryptocurrencies. What’s more Tether informed traders that it has no exposure to Samuel Bankman-Fried’s FTX and Alameda Research.
Crypto influencers and experts believe the scuffle between two leading cryptocurrency exchanges FTX and Binance resulted in a USDT shakeout. The crisis started when Binance criticized FTX CEO Samuel Bankman-Fried for his opinion on regulation of DeFi and then announced the open-market sale of FTX’s native token FTT worth $584 million.
USDT began its downslide as the friction between the two exchanges became public. In the end FTX was forced to ask Binance for aid during its liquidity crisis. Binance signed a letter of intent to buy FTX. Yet despite this USDT price suffered a temporary depeg as the debacle sent shockwaves through the crypto industry.
Seeing a price discrepancy of USDt on coingecko. While USDt trades close to parity (+-10bps), coingecko reports 3% from parity.
Looks like a glitch to me.
Binance, Bitfinex, Coinbase are all trading within 10bps from parity.
— Paolo Ardoino (@paoloardoino) November 9, 2022
USDT depeg response from CoinGecko
Bobby Ong, COO at CoinGecko, apologized for the USDT depeg and stated that there was a data issue from the API connection with a few cryptocurrency exchanges. CoinGecko has patched the issue and is watching it closely.
Sorry about the USDT FUD from our side. Tether did not depeg. There was a data issue on our side coming from API connection issues with a few exchanges. We have patched the issue but monitoring things closely. https://t.co/ZWYC7qHImv
— Bobby Ong (@bobbyong) November 9, 2022
USDT is SAFU but Bitcoin price suffered decline
The USDT depeg was a technical issue, according to CoinGecko’s COO. In this case, USDT holders and the stablecoin is SAFU, meaning safe from crypto market volatility.
Bitcoin’s decline to multi-year lows at $17,000 is a result of selling pressure across exchanges. Bitcoin price suffered the impact of the uncertainty and loss of confidence among crypto traders from FTT’s implosion.
Bitcoin price recovered from the decline and climbed above $17,500. Yet analysts are bearish on the asset’s comeback to the key psychological level of $20,000. As the US Midterm Election outcome started rolling out, several candidates that are known as pro-crypto have made it into office.
The US Midterm Election outcome is therefore favorable to Bitcoin and crypto regulation, so far. This is a developing update and there will be higher clarity once progress is made in discussions on stablecoin bill or crypto asset regulation.
It seems USD Tether therefore suffered a drawdown on account of technical issues on CoinGecko. CTO Paolo Arduino’s evaluation was accurate and Tether is now exchanging hands at $1.01, above its $1 peg.