Stablecoins are Risky as USDT is Showing Signs of Depeg
In Brief
The total stablecoin market cap declined by 0.25% over the past 24 hours, with an average price change of 0.71%. USDT, the largest stablecoin by market cap, has fallen by 0.23% and is now trading near a local bottom.
Stablecoins currently appear unstable as the volatile crypto market influences their behavior. Over the past day, the total stablecoin market capitalization has dipped by 0.25%, experiencing an average price change of 0.71%.
This downward trend follows the depegging signs shown by the most prominent stablecoin in terms of market cap, USDT. In the past 24 hours, the USDT’s price dropped by 0.23%, reaching a local low point of $0.997. This price decline corresponds to the loss of approximately $270 million in the coin’s market capitalization.
Binance’s data currently places USDT back at the $1 mark, contradicting information from Trading View, which lists the coin’s price at $0.9974 at the time of writing.
USDT’s detour from its peg to the US dollar coincides with a boost in USDC’s market cap. Since USDT deviated from its peg, USDC’s market cap has seen a $40 million rise. Moreover, the 24-hour trading volume for USDC has surged by 60%.
Other stablecoins, such as DAI and BUSD, have also experienced significant drops, approximately $80 million and $90 million, respectively. Crypto.news data reveals a massive 255% increase in DAI’s trading volume in the last 24 hours.
The USDT’s depeg is concurrent with an upsurge in its supply annual percentage rate (APR) on the Aave protocol. The rate shot up from 2.75% to nearly 15% in less than a day. Data from the lending platform indicates that both variable and stable borrowing annual percentage yields (APY) have also notably increased.
Read more related articles:
- Edge DeFi and the USDC Depeg
- Stablecoins: What are crypto stablecoins, and how do they work? (2023)
- Algorithmic Stablecoin
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About The Author
Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
