USDT, USDD, FRAX – Traders are aggressively transferring their assets to stablecoins as the Alameda/FTX/Binance crisis enters its most hazardous stage. Even USD-pegged assets, however, are not now considered to be “safe haven” assets.
USDT down, USDC, BUSD up
Unusual activity was observed on the Curve Finance (CRV) and Aave (AAVE) pools by traders and analysts. The largest stablecoin, U.S. Dollar Tether (USDT), is said to have been “shorted” by Alameda Research by switching borrowed USDT for USD Coins (USDC) issued by Circle.
The USDT peg became unbalanced as a result of this monster activity right away, and the asset fell as low as $0.98, the lowest level since the UST crash in May. USDC, on the other hand, “spiked” to $1,007.
This disparity creates risky arbitrage opportunities. The FTX-backed address holding the largest stablecoin, worth over $46 million, was then blocked by Tether Limited, the company that runs USDT. Automated tracking systems recorded this restriction.
The most from this fear was Binance’s stablecoin, BUSD, whose price surged above $1,012 as USDT holders began converting their holdings to BUSD.
Decentralized stablecoins USDD and FRAX are also impacted
The continued frenzy hurt even stablecoins linked to the euro. According to CoinGecko, the price of Circle’s Eurocoin (EUROC) increased above €1.04 on significant spot markets.
Decentralized stablecoins have so far been the biggest losers in this turmoil. USDD, a stablecoin supported by algorithms and part of the Tron (TRX) ecosystem, momentarily fell below $0.968. Justin Sun instantly added fresh liquidity to a portfolio of assets supporting the USD.
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