Tether’s Margin Risk Is Still More Increased Than USDC and BUSD
The recent flood of negative news has caused Tether’s capitalization to drop from $72.4 billion on June 12 to $70.8 billion on June 16. Most likely because investors converted from USDT to USD, Tether later denied these rumors.
In mid-May, when the crash of LUNA-UST took place, USDT was also depeg to $0.95. Tether’s capitalization then also dropped from $82 billion to $72 billion as users rushed to withdraw.
This information has been confirmed by Tether and confirmed that they are still “overwhelming” to return $10 billion to investors in just 72 hours, which is the clearest proof of the health of the company, smashing the news. Unfounded rumors that Tether does not have enough collateral.
However, compared to the other two major stablecoins on the market, USD Coin (USDC) and Binance USD (BUSD), Tether’s margin risk is still higher.
Specifically, USDT’s collateral assets as of the end of March 2022 include cash ($4.1 billion), US Treasury bonds ($39.1 billion), commercial paper ($20 billion), and other assets ($18.6 billion). Meanwhile, USDC is backed by $11.6 billion in cash and $39 billion in US Treasury bonds; and BUSD is 100% backed by $17.4 billion in cash as of the end of March 2022.
USDC and BUSD are also not depeg as strongly as USDT in both May and June drops, but on the contrary, many investors are “running away” from USDT to these two stablecoins.
Tether has continuously promoted expansion to other blockchains in the past few weeks, issuing USDT on Polygon and Tezos in the past few weeks, bringing the number of layer-1 support to 12. TRON and Ethereum are still two blockchains most concentrated USDT, accounting for 66 billion USDT out of the total of more than 70 billion USDT in circulation.
Another stablecoin that is also being depeg is USDD, the “copy” version of UST on TRON, despite the ecosystem spending a lot of money to subsidize TRX in the past few days.
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