USDT, the stablecoin issued by Tether, has fallen 1% below its peg to the U.S. dollar today amid ongoing market turmoil.
The largest stablecoin on the market fell to $0.9911 today, according to data via TradingView. It has seen a 0.68% decrease in the past hour.
Crypto prices more broadly have also come under pressure this week. Speculators are monitoring the rapidly developing story of crypto exchange FTX and its downfall.
Alameda Research borrowed 250,000 USDT on Aave this morning, which it moved to Curve an hour ago. The following Etherscan address is associated with Alameda and shows the recent transaction. Traders are speculating that the firm might be shorting the asset, although it’s unclear what its overall trading position is, looking solely at on-chain data.
At the same time, Curve’s stablecoin pool is getting unbalanced. The large majority — some 82% — of the pool is in USDT, resulting in less liquidity for other stablecoins. This will have been caused by traders swapping USDT for other stablecoins.
How did we get here?
Sam Bankman-Fried’s exchange came under scrutiny last week when a balance sheet relating to Alameda Research — a trading shop he also owns — was leaked. The balance sheet showed significant liabilities and holdings of FTT, FTX’s exchange token.
Selling pressure from Binance of FTT over the weekend put increasing pressure on FTX and its trading arm. By Tuesday, Binance had agreed to acquire the struggling exchange — but the deal was off by Wednesday after a review of FTX’s finances.
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