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<ul class="summary-list"><li><keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">Tether</keyword> investors have pulled $10 billion from the <keyword id="11931191" type="UNKNOWN" weightage="60" keywordseo="stablecoin" source="Orion">stablecoin</keyword> since the <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> <keyword id="11995361" type="UNKNOWN" weightage="60" keywordseo="market" source="Orion">market</keyword> crashed earlier in May. </li><li>About $1 billion worth of <keyword id="12682860" type="UNKNOWN" weightage="60" keywordseo="tokens" source="Orion">tokens</keyword> were redeemed Saturday, and another $1.5 billion three days earlier, per the Guardian. </li></ul>Tether has paid out $10 billion in withdrawals to investors since the cryptocurrency market crashed earlier in May, leading the stablecoin to lose hold of its dollar peg. Of that, $1 billion of tether was redeemed at the weekend, and $1.5 billion three days before that, according to an analysis of blockchain data <a href="https://www.theguardian.com/technology/2022/may/22/tether-pays-out-10bn-in-withdrawal-since-crypto-crash">reported by the Guardian</a>. The withdrawals signal hesitancy among investors about <a href="https://markets.businessinsider.com/currencies/usdt-usd">tether</a>'s future, even though the stablecoin has regained its dollar peg and its issuer has vowed to keep paying out big redemptions. The collapse of TerraUSD (UST) earlier this month has cast doubt on the robustness of stablecoins and their worth as a less-volatile store of value in the crypto market. Tether, the third-largest cryptocurrency with a market capitalization of $73 billion, is designed to easily redeemed one-to-one to the US dollar. Its issuer maintains the peg by backing each of the coins with <a href="https://tether.to/en/transparency/">US dollars in bank accounts</a> and other stable assets.But the token <a href="https://markets.businessinsider.com/news/currencies/tether-depeg-dollar-fall-cryptocurrency-market-panic-terrausd-luna-2022-5">broke its peg and fell to $0.95</a> on May 12, as crypto <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> plummeted on the back of the crash in UST and luna token in <a href="https://markets.businessinsider.com/news/currencies/terra-terrausd-luna-ust-stablecoin-plunge-do-kwon-death-spiral-2022-5">a "death spiral"</a>. Tether has since recovered from the drop, its largest since March 2021, and was trading slightly below the $1 mark Monday, according to <a href="https://coinmarketcap.com/currencies/tether/">CoinMarketCap data</a>. Tether's reserves, and its ability to redeem the token as promised, have come under scrutiny after a series of audits showed the stablecoin wasn't fully backed by US dollars as the issuer initially claimed. Investors have <a href="https://markets.businessinsider.com/news/currencies/tether-reserves-hindenburg-research-1-million-reward-exclusive-details-stablecoin-2021-10">long questioned what reserves Tether has</a> to back up its dollar peg. Earlier in May, after tether's supply in circulation <a href="https://markets.businessinsider.com/news/currencies/tether-lost-7-billion-market-value-withdrawals-stablecoin-dollar-peg-2022-5">slipped to $7 billion</a>, Tether's chief technology officer argued the redemptions were a sign of strength in the stablecoin."We have redeemed 7B in 48h, without the blink of an eye. How many institutions can do the same?" Paolo Ardoino, Tether's chief technology officer, said on Twitter. "We can keep going if the market wants, we have all the liquidity to handle big redemptions and pay 1:1. Yes, Tether is fully backed."In its latest audited accounts, published Thursday, the stablecoin's issuer said it <a href="https://markets.businessinsider.com/news/currencies/tether-reserves-stablecoin-commercial-paper-treasuries-adds-non-us-debt-2022-5">now holds $286 million in short-term non-US government debt</a> as part of its reserves, and it has cut its holdings of commercial paper — a form of short-term unsecured corporate debt — in favor of Treasuries. Tether has reduced its commercial paper holdings by around $4 billion since its last attestation in February. It now has $20 billion of its cash in commercial paper, $7 billion in money market funds, and almost $40 billion in US Treasury bills in its reserves, per the Guardian.A collapse in Tether would be <a href="https://markets.businessinsider.com/news/currencies/tether-stablecoin-collapse-cryptos-lehman-brothers-moment-luna-terra-usdt-2022-5">catastrophic for the wider crypto market</a>, and could push investors to liquidate other positions, according to GlobalBlock analyst Marcus Sotiriou and other analysts."If redemptions continue at this pace and Tether can't meet them, we could see a nuclear winter in crypto," FXEmpire analyst <a href="https://www.fxempire.com/forecasts/article/crypto-update-markets-wobbled-could-tether-usdt-collapse-next-1005470">AG Thorson</a> has said.Tether did not immediately respond to Insider's request for comment. Read more: <a href="https://www.businessinsider.com/crypto-prices-trading-strategy-bear-market-safe-haven-dexterity-capital-2022-5" target="_blank" rel="noopener noreferrer">Retail traders are getting burned and even big players are taking a hit from tether's limited depeg, according to a crypto prop shop co-founder. Here's the 2 catalysts that could revive retail interest — and a safe haven to turn to</a>

Tether investors have redeemed $10 billion worth of the token since the crypto rout rattled faith in stablecoins

<ul class="summary-list"><li><keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">Tether</keyword> suffered its biggest drop in over a year as the stablecoin broke its peg and dropped as low as $0.945.</li><li>Panic was spreading in the <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> Thursday after stablecoin TerraUSD hit a low of $0.30 and sister token luna plunged 98%.</li></ul><a href="https://markets.businessinsider.com/currencies/usdt-usd">Tether</a>, the world's biggest stablecoin, tumbled as low as $0.94 on Thursday as panic spread across crypto markets after a dramatic plunge in the TerraUSD and luna tokens.The stablecoin fell to $0.9455 early Thursday before rebounding to trade at $0.983 as of 4.48 a.m. ET.It was the sharpest drop in tether — which has a market capitalization of around $80 billion — since March 2021, raising concerns about an asset that is central to the functioning of crypto markets.The second-biggest stablecoin, <keyword id="12145967" type="UNKNOWN" weightage="60" keywordseo="usd-coin" source="Orion">USD Coin</keyword>, held steady at $1 on Wednesday.<a href="https://www.businessinsider.com/personal-finance/stablecoin">Stablecoins</a> are <keyword id="11895317" type="UNKNOWN" weightage="60" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword> that should be worth $1 at all times. They're widely used by crypto traders as a supposedly steady and less volatile place to park their cash.But the <a href="https://markets.businessinsider.com/news/currencies/terra-terrausd-luna-ust-stablecoin-plunge-do-kwon-death-spiral-2022-5">dramatic fall in TerraUSD</a>, the third-biggest stablecoin, to as low as $0.30 on Wednesday has sent shivers across the crypto market.TerraUSD's sister cryptocurrency luna, which is free floating, has crashed around 98% in the last two days."<keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">Stablecoins</keyword>' volatility is a new reality for the crypto market," said Alex Kuptsikevich, senior market analyst at trading platform FxPro. "Previously, investors preferred to park capital in stable currencies."The "entire crypto market is crumbling like a house of cards," Kuptsikevich said, with <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> down around 10%, and <a href="https://markets.businessinsider.com/currencies/eth-usd">ethereum</a> and <a href="https://markets.businessinsider.com/currencies/bnb-usd">binance coin</a> down roughly 19%.Tether is a stablecoin that is backed by liquid assets, which should allow it to hold at $1 at all times.But critics have <a href="https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether">long questioned</a> whether the stablecoin has enough assets on hand to be able to handle a mass withdrawal by investors.Analysts have said a run on tether could be a disaster for the crypto sector, given its importance to trading. A mass sale of tether's liquid assets, which include corporate bonds, could also trigger trouble in other markets.Tether's management said in October that "all tether tokens are fully backed."Paolo Ardoino, Tether's chief technical officer, said the token is honoring redemptions at $1 per token and that 300 million had been redeemed in the last 24 hours "without a sweat drop."Read more: <a href="https://www.businessinsider.com/crypto-price-market-crash-terra-ust-stablecoin-stability-do-kwon-2022-5" target="_blank" rel="noopener noreferrer">Algorithmic stablecoin UST has struggled to maintain its peg amid the crypto crash. We spoke to 6 crypto-investing heavyweights who are sounding the alarm on the project — and one who's making a bull case</a>.

Stablecoin tether breaks its peg and drops to $0.95 as panic hits crypto markets after collapse of TerraUSD

<ul class="summary-list"><li><keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">Tether</keyword> survived another market event that saw the stablecoin briefly lose its one-to-one US dollar peg.</li><li>Experts say this could lead to more clarity from the company on what assets are backing Tether. </li></ul>The stablecoin shockwaves rippling through the cryptocurrency market represent a wakeup call for Tether, whether it knows it or not.After losing its one-to-one US dollar peg on Thursday — falling as low as $0.95 — Tether quickly moved to ease investor concern. That came after the implosion of the <keyword id="12507550" type="UNKNOWN" weightage="60" keywordseo="terra" source="Orion">Terra</keyword> algorithmic stablecoin raised fears that others are vulnerable too.Tether has since regained its benchmark, but questions still loom as to how Tether will navigate the new <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> landscape, and if regulators will force their hand."Sadly, its balance sheet is not sufficiently transparent to gain comfort. But as long as it is considered 'risk-free' it presents risk," Marc Rubinstein, author of the Net Interest newsletter, wrote on Substack.Tether is the largest stablecoin with a market capitalization of nearly $80 billion. It's often used to facilitate crypto transactions due to its attractiveness as a token backed by highly liquid assets. Tether says it has billions in reserves, including US government debt and corporate bonds, to help process transactions and withdrawals.Still, details on those corporate bonds, such as the identities of the issuers, remain undisclosed. And Tether is also reluctant to reveal more about its government debt holdings. In an <a href="https://www.ft.com/content/5887ef43-d43a-4608-a1ac-aacc99f076b9">interview with the Financial Times</a>, Chief Technology Officer Paolo Ardoino declined to give details about its US government bonds because he did not "want to give our secret sauce."Martha Reyes, head of research at BEQUANT, a digital brokerage and exchange noted that <a href="https://www.wired.com/story/why-tethers-collapse-would-be-bad-for-cryptocurrencies/">Thursday wasn't the first time Tether has depegged</a> from the US dollar, but it's still a stark sign that more regulation and greater visibility into the space is needed. "To assuage concerns and encourage more entrants into the space, ideally it should disclose more details and regulators may force the issue," she told Insider.Meanwhile, a Barclays analyst said in a recent note that Tether's quarterly updates don't provide timely insights about liquidity for a portfolio comprised of short-maturity assets.To be sure, Tether disclosed Thursday that it boosted the amount of Treasury holdings, which now account for over 52% of the company's assets, and it expects to add to that amount. Meanwhile, it's been lowering its commercial debt. Those holdings were revealed after a settlement last year with the New York state attorney general, who alleged Tether wasn't fully backed by US dollars at all times.Tether said that it's confident it can continue to honor its commitment to clients and customers. "Tether has maintained its stability through multiple black swan events and highly volatile market conditions and even in its darkest days Tether has never once failed to honour a redemption request from any of its verified customers," the company said in an email to Insider. In fact, Tether said Thursday it processed more than $3 billion in withdrawals "pretty quickly," with redemption requests ranging from $100,000 to $600 million.Such transparency may not be enough to hold off regulators, or the wider crypto market. While Tether differs from algorithmic <keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">stablecoins</keyword>, which use complex code to mint and burn tokens to maintain a peg, it is still at the mercy of the ebbs and flows in investor sentiment.And experts say the market may be in for tougher regulations that will force Tether to open their books wider."Everything crypto, including stablecoins backed by real assets, got sold and fears are elevated that stablecoin regulation will only get tougher," said Edward Moya, senior market analyst at OANDA.

Tether losing its one-to-one US dollar peg exposed its vulnerability &mdash; but also showed how the stablecoin can build confidence in the future

<ul class="summary-list"><li>The cryptocurrency market lost $400 billion during the week as two stablecoins lost their pegs to the US dollar. </li><li>The losses threw algorithmic stablecoin TerraUSD and "traditional" stablecoin <keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">Tether</keyword> into the spotlight. </li></ul>The latest <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> sell-off emanating from the unexpected dollar-peg losses by <a href="https://www.coingecko.com/en/coins/terra-usd">TerraUSD</a> and <a href="https://www.coingecko.com/en/coins/tether">Tether</a> tested the confidence of investors this week — and could amplify calls for Washington to work faster on regulation, experts told Insider. While <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> showed signs of stabilizing above $30,000 on Friday, the crypto market saw more than $430 billion of the market's valuation wiped out between Monday and mid-Thursday, bringing the cap to $1.12 trillion, <a href="https://coinmarketcap.com/charts/">according to CoinMarketCap data</a>. The price plunges of TerraUSD and its sister coin <a href="https://www.coingecko.com/en/coins/terra-luna">luna</a> <a href="https://markets.businessinsider.com/news/currencies/stablecoin-cryptocurrency-crash-terra-luna-usdt-tether-usdc-altcoins-investing-2022-5">threw the spotlight on algorithmic stablecoins</a> whose values are derived by a combination of computer codes and reserves to maintain a peg to a fiat currency. The market's turbulence spread to Tether, sending the market's third most valuable cryptocurrency briefly below its $1 peg before it regained parity. "If there's a complete loss of confidence with stablecoins then you can see that the market will really struggle to find footing here," Ed Moya, senior market analyst at forex trading platform Oanda, told Insider. "<keyword id="12507550" type="UNKNOWN" weightage="60" keywordseo="terra" source="Orion">Terra</keyword> was flawed and that was seen by a lot of people. Tether is [recovering] its peg," a move that should soothe some nerves, he said. Bitcoin this week dropped below $27,000 for the first time since late 2020 as investors navigated the Terra-Luna collapse and Tether's temporary slippage. Investors in the past <a href="https://markets.businessinsider.com/news/currencies/tether-reserves-hindenburg-research-1-million-reward-exclusive-details-stablecoin-2021-10?utm_medium=ingest&amp;utm_source=markets">have questioned what reserves Tether has</a> to back up its peg. "There were definitely some unique characteristics to this [crypto selloff]," including that took place in a broader financial market contending with decades-high inflation and a war between Russia and Ukraine, said Chris Kline, COO and co-founder of Bitcoin IRA. "Then you add in this component of these experiments of stablecoins, and UST is a new experiment of a stablecoin that was built differently than the ones that came before it," said Kline. "This was algorithmically done, which helps with its efficiency. The intent of it is the future of crypto and blockchain and how we use this technology overall … and it had a weakness and its weakness was exploited in one way or another," said Kline. As UST lost its peg, its holders tried cashing out through luna instead of selling UST in the market. That spurred more minting of luna tokens as UST was burned. CryptoCompare said more than 6 trillion new luna tokens had been minted since May 8 which diluted its price to $0.00000953."We do not believe there is a risk of a permanent depeg of …[Tether], but rather, fear in the <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> has had contagion effects on the entire sector," said CryptoCompare, a market data provider, in a note. Luna's market cap was $41 billion just five weeks ago and tumbled to less than $7 million this week, marking the "largest destruction of wealth in this amount of time in a single project in crypto's history," CryptoCompare said. Regulation watch The crypto selloff caught the eye of <a href="https://markets.businessinsider.com/news/currencies/cryptocurrencies-janet-yellen-stablecoins-terra-tether-luna-stability-risks-markets-2022-5">Treasury Secretary Janet Yellen</a> who told lawmakers losses in stablecoins don't yet threaten financial stability but risks could rapidly rise. Fitch Ratings said this week it expects recent developments to lead to increased calls for regulation of stablecoins. "I've been saying for a long time the need for regulatory clarity is crucial in order to allow the crypto market to mature," Scott Sheridan, CEO of Tastyworks, an online brokerage platform for options traders, wrote in an email to Insider. "If we can get some regulatory clarity that allows listed exchanges in the US to begin offering derivatives, I think the entire game changes," he says. "More liquidity means tighter bid/ask differentials and more price stability overall."Meanwhile, the cryptocurrency market may need to see a sustainable upswing in stocks to start gaining traction as crypto has been heavily correlated with the <a href="https://markets.businessinsider.com/index/nasdaq_composite">Nasdaq</a> recently. Moya at Oanda sees $30,000 acting as intraday resistance for bitcoin in the short term. He said that the $30,000 level would be key for many institutional investors that bought in last year. For bitcoin to test the $20,000 level in another crash would be "heartbreaking," he added.

Crypto crashed this week as 2 stablecoins broke the buck. Here's what that means, and where the market goes next.

<ul><li>The <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> market is facing a crisis of confidence following the implosion of <keyword id="12663761" type="UNKNOWN" weightage="60" keywordseo="luna" source="Orion">Luna</keyword> and <keyword id="12507550" type="UNKNOWN" weightage="60" keywordseo="terra" source="Orion">Terra</keyword>.</li><li>Crypto investors often point to <keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">stablecoins</keyword> as essential to growing the sector, but now some are questioning their viability.</li><li>The crypto bear market highlights just how precarious the $1.2 trillion sector is as it relies on the hope of others to drive prices higher.</li></ul>There's a crisis of confidence roiling the cryptocurrency market following the <a href="https://markets.businessinsider.com/news/currencies/terra-terrausd-luna-ust-stablecoin-plunge-do-kwon-death-spiral-2022-5?utm_medium=ingest&amp;utm_source=markets">implosion of Luna and its related stablecoin, Terra</a>, and the lack of confidence is spreading through the ecosystem.Terra depegged from $1 earlier this week and is now <keyword id="6368158" type="UNKNOWN" weightage="60" keywordseo="trading" source="Orion">trading</keyword> at around 50 cents, as the algorithmic stablecoin erased more than $5 billion in market value virtually overnight. Stablecoins are meant to simply hold their value and remain liquid to facilitate trades in other <keyword id="11895317" type="UNKNOWN" weightage="60" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword>. But Terra's destruction show stablecoins can have all the risk of crypto without any of its upside potential.The value destruction in Luna was even worse, as it lost $30 billion in market value after declining by 99% over the past week. Now some crypto investors are awakening to the fact that the value of what they own is reliant solely on supply and demand dynamics, with the hope that they'll be able to sell the coins to someone else at a higher price in the future. But that hope doesn't provide comfort when crypto is in a full-blown bear market, <a href="https://markets.businessinsider.com/news/currencies/crypto-market-cap-plunged-500-billion-last-week-1-trillion-2022-5">having erased nearly $2 trillion in value since its November peak.</a>Unlike stocks, cryptocurrencies don't have an underlying stream of earnings that investors can size up, project into the future, and value based on time-tested strategies like discounted cash flow models. Instead, crypto investors can only hope that confidence in the sector is restored and adoption continues to move forward, driving more demand for what they already own.That may be difficult as Terra's stablecoin implosion is only likely to trigger intense scrutiny from regulators over the coming months. It's also difficult because the sharp decline in Terra has spilled over to the world's largest stablecoin, <keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">Tether</keyword>.Tether is worth more than $80 billion and briefly saw its value <a href="https://markets.businessinsider.com/news/currencies/tether-depeg-dollar-fall-cryptocurrency-market-panic-terrausd-luna-2022-5?utm_medium=ingest&amp;utm_source=markets">depeg from $1 and fall 5% to $0.95 on Thursday.</a> Many <a href="https://markets.businessinsider.com/news/currencies/tether-reserves-hindenburg-research-1-million-reward-exclusive-details-stablecoin-2021-10?utm_medium=ingest&amp;utm_source=markets">investors have questioned whether Tether's reserves</a> are actually invested in liquid, zero-risk securities like US treasuries.The stability of Tether is essential to restoring confidence in the crypto market, and Thursday's showing is not a good sign. Another issue crypto investors are grappling with is whether the implosion of Terra and the weakness in <a href="https://markets.businessinsider.com/news/currencies/tether-stablecoin-collapse-cryptos-lehman-brothers-moment-luna-terra-usdt-2022-5">Tether represents a systemic risk</a> to the broader crypto and financial <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>. If it does, regulators could come down hard on the sector, which has largely been left to itself ever since <keyword id="11893902" type="UNKNOWN" weightage="60" keywordseo="bitcoin" source="Orion">bitcoin</keyword> was introduced in 2009. For a market that is solely reliant on the dynamics of supply and demand, it's crucial that the crypto market quickly cleans up its act and restores confidence to investors, otherwise the cascading waterfall seen in Terra and Luna this week could spread to other crypto coins.And restoring confidence in the crypto market could be hard to do given its decentralized nature, which once again highlights why confidence among its users and investors is crucial to driving future price appreciation.

This week's vicious crypto crash shows a crisis of confidence in the entire ecosystem

<ul><li>A collapse of the <keyword id="12067802" type="UNKNOWN" weightage="60" keywordseo="tether" source="Orion">Tether</keyword> stablecoin would be <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword>'s "Lehman Brothers moment," according to an analyst from GlobalBlock. </li><li>Following Terra's collapse, the $81 billion Tether stablecoin began to deviate from its $1 peg.</li><li>"I am optimistic that [Terra's] fall would not be that catastrophic — a collapse of [Tether] would be though," GlobalBlock said.</li></ul>Crypto <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> are getting roiled this week following <a href="https://markets.businessinsider.com/news/currencies/terra-terrausd-luna-ust-stablecoin-plunge-do-kwon-death-spiral-2022-5">the collapse of Luna and its related stablecoin, Terra,</a> which deviated by more than 50% from its $1 peg this week.The implosion of Terra has spread to other <keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">stablecoins</keyword> in recent days, including Tether, which is the largest stablecoin based on its $81 billion market capitalization. Investors <a href="https://markets.businessinsider.com/news/currencies/tether-reserves-hindenburg-research-1-million-reward-exclusive-details-stablecoin-2021-10">have long questioned what reserves Tether has</a> to back up its $1 peg, and the stablecoin <a href="https://markets.businessinsider.com/news/currencies/tether-depeg-dollar-fall-cryptocurrency-market-panic-terrausd-luna-2022-5">traded off as much as 5% to $0.95 early Thursday.</a>The destabilization of various stablecoins could represent crypto's "Lehman Brothers moment" as investors begin to worry about the systemic risk ingrained in cryptocurrency markets.During the 2008 Great Financial Crisis, Lehman Brothers went bankrupt due to its overexposure to bad credit, and around the same time money market funds broke the buck, or deviated from its dollar peg due to extreme investor sentiment. But crypto can avoid its "Lehman Brothers moment" as long as Tether doesn't go down the same path as Terra, according to GlobalBlock analyst Marcus Sotiriou."Some have called this a 'Lehman Brothers' moment due to the contagion this may cause, however I am optimistic that UST's [Terra's] fall would not be that catastrophic — a collapse of USDT [Tether] would be though, and we have seen the largest stablecoin by market cap wobble over the past 24 hours," Sotiriou said in a note to Insider.But Sotiriou doesn't see Tether actually going down the same path as Terra and significantly deviating from its $1 peg."Although USDT becoming de-pegged persistently is a risk worth noting, I am confident that the USDT peg will be restored as I think Tether has sufficient backing in their reserves, and its mechanics are safer than the UST stablecoin," Sotiriou said.But the implosion of Terra is likely to have a wide impact on the crypto market as so many projects and businesses were exposed to the stablecoin, including many funds, VCs, and market makers, "which may be forced to liquidate other positions," Sotiriou said. Additionally, the crypto market has fallen by nearly $2 trillion since its peak in late November. That destruction of value could have a wide-ranging impact on markets and even the broader economy due to the wealth effect. That's the idea that as individuals become wealthier based on the assets they own, they are more inclined to spend money and help stimulate the economy."There is $1.3 trillion tied up in virtual currencies, so any threats to this market have real-world wealth effects as well. We expect more aggressive US regulation on this front as a result," <a href="https://www.datatrekresearch.com/">DataTrek Research</a> said in a Thursday note.

A collapse of Tether could be crypto's 'Lehman Brothers moment' as the world's top stablecoin begins to wobble and major tokens plummet, analyst says

<ul class="summary-list"><li>Binance's CEO got alarmed by Sam Bankman-Fried's crypto trading moves as FTX collapsed, per the NYT. </li><li>Changpeng Zhao urged the FTX founder to stop, or risk destabilizing crypto — and paying for that.</li></ul>As crypto exchange FTX collapsed, Binance CEO Changpeng Zhao got alarmed that its then-boss Sam Bankman-Fried was making moves that could topple the entire industry and tried to stop him, <a href="https://www.nytimes.com/2022/12/09/technology/ftx-text-messages.html">the New York Times has reported</a>. Zhao urged Bankman-Fried to hold off from making trades that the Binance boss believed would intensify the crypto crisis sparked by FTX's implosion, the Friday report said, citing a text messages obtained by the NYT."Stop now, don't cause more damage," Zhao wrote in a group chat with Bankman-Fried and other crypto executives."The more damage you do now, the more jail time." In the text messages, Zhao <a href="https://markets.businessinsider.com/news/currencies/binance-boss-cz-sam-bankman-fried-ftx-alameda-tether-crypto-2022-12">accused FTX's sister trading arm Alameda Research of trying to drive</a> the price of stablecoin Tether below the $1 level it's meant to be pegged at. Analysts have repeatedly warned that if Tether collapses, that would cause a wider crypto crash.The Binance boss pointed to a $250,000 trade by Alameda that he believed was orchestrated by Bankman-Fried to depeg Tether. But the FTX founder denied the claims, calling them "absurd," the NYT reported. "My honest advice: stop doing everything," Zhao told him in response. "Put on a suit, and go back to DC, and start to answer questions."Representatives for Zhao and Bankman-Fried did not respond immediately to Insider's requests for comment.Those messages were sent in early November, a day before FTX filed for <a href="https://markets.businessinsider.com/news/currencies/ftx-bankruptcy-sam-bankman-fried-ceo-crypto-binance-alameda-markets-2022-11">Chapter 11 bankruptcy</a>. Since then, Zhao — commonly known as "CZ" — has described Bankman-Fried as "<a href="https://markets.businessinsider.com/news/currencies/greatest-fraudsters-in-history-cz-binance-ceo-blasts-sam-bankman-2022-12">one of the greatest fraudsters in history</a>", joining a chorus of <a href="https://www.businessinsider.com/coinbase-ceo-sam-bankman-fried-interviews-kid-gloves-softball-questions-2022-12">influential figures pointing the finger</a> at the disgraced ex-CEO as the <a href="https://markets.businessinsider.com/news/currencies/ftx-sbf-bankman-fried-investigation-crypto-market-manipulation-luna-terra-2022-12">investigations pile up.</a>US federal authorities among others are examining accusations against Bankman-Fried, specifically that he intentionally mishandled billions of dollars in FTX customer funds. There are allegations the user funds were moved to Alameda. Meanwhile, Bankman-Fried is reportedly now being investigated over allegations that Bankman-Fried <a href="https://markets.businessinsider.com/news/currencies/ftx-sbf-bankman-fried-investigation-crypto-market-manipulation-luna-terra-2022-12">manipulated the market for two cryptocurrencies</a> in the spring. US federal prosecutors have begun a probe into whether he acted to influence the prices of <a href="https://markets.businessinsider.com/news/currencies/luna-terra-stablecoin-price-crypto-crash-dollar-2022-5?utm_medium=ingest&amp;utm_source=markets" rel="">TerraUSD and Luna</a> to the advantage of FTX and Alameda, the NYT said in a separate report.

Binance's CEO tried to warn Sam Bankman-Fried: 'The more damage you do now, the more jail time.'

<ul class="summary-list"><li>It's too early to be bullish about stocks despite the recent sell-off, <keyword id="11957019" type="UNKNOWN" weightage="60" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword>'s <keyword id="12095056" type="UNKNOWN" weightage="60" keywordseo="mike-wilson" source="Orion">Mike Wilson</keyword> said Monday.</li><li>The strategist said he expects the <keyword id="11898248" type="UNKNOWN" weightage="60" keywordseo="sp-500" source="Orion">S&amp;P 500</keyword> to fall another 14% by the end of second-quarter earnings season, to 3,400.</li></ul>It's too early to become bullish on stocks despite the major sell-off so far this year, according to Morgan Stanley's top equity strategist Mike Wilson.Wilson predicted in a note Monday the <a href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> would fall to 3,400 by the end of second-quarter earnings season, which is typically in August. That's a roughly 14% drop from the benchmark index's 3,946 level on Monday.The strategist said equity clients are "bearish" — meaning pessimistic — which he said is "a necessary condition for a sustainable low, but an insufficient one."Wilson added: "While sentiment and positioning for active institutional investors is low, asset owner clients remain heavily exposed to equities. As they reallocate, this should further weigh on equity prices."Stocks have fallen sharply this year as the Federal Reserve and other central banks have <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">hiked interest rates</a>; Russia has invaded Ukraine; inflation has rocked economies; and Chinese growth has slowed.The S&amp;P 500 has fallen around 18% this year, putting it close to so-called <a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-need-to-know-about-sp500-bear-markets-2022-5">bear market territory</a>, which marks a drop of 20% from recent highs.Wilson was one of the earliest strategists to turn pessimistic about stocks, and has continued to warn investors that there's further to fall.He said on Monday so-called bear-market rallies — periodic rises in stocks during a sell-off period — should be used by investors to exit vulnerable parts of the market.The strategist said Morgan Stanley is particularly concerned about the willingness of people to spend money during a period of red-hot inflation. A survey by the bank found more than half of consumers are planning to cut back spending over the next six months.Read more: <a href="https://www.businessinsider.com/crypto-prices-trading-strategy-bear-market-safe-haven-dexterity-capital-2022-5" target="_blank" rel="noopener noreferrer">Retail traders are getting burned and even big players are taking a hit from tether's limited depeg, according to a crypto prop shop co-founder. Here's the 2 catalysts that could revive retail interest — and a safe haven to turn to</a>

Morgan Stanley warns it's too early to be bullish on stocks — and predicts the S&P 500 will drop another 14% by August

<ul><li>While bitcoin and ethereum dominate the headlines, there are more than 19,000 <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> coins.</li><li>With less liquidity and more volatility, these alternative <keyword id="11895317" type="UNKNOWN" weightage="60" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword> can deliver investors massive losses or gains in a short period of time.</li><li>These were the five worst performing cryptocurrencies over the past week, according to data from CoinMarketCap.</li></ul>Bitcoin's<a href="https://markets.businessinsider.com/news/currencies/bitcoin-price-outlook-3month-low-fed-policy-kazakhstan-hash-rate-2022-1"> bear market</a> has sucked the life out of many popular cryptocurrencies, with the total crypto market capitalization <a href="https://markets.businessinsider.com/news/currencies/crypto-market-cap-plunged-500-billion-last-week-1-trillion-2022-5">falling from $3 trillion to around $1.2 trillion today.</a> With more than 19,000 cryptocurrencies in existence and counting, there are more than triple the number of crypto coins than there are US exchange-listed stocks. That massive amount of supply makes it nearly impossible to keep track of all the big movers in the crypto sector outside of well known coins like <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a>, <a href="https://markets.businessinsider.com/currencies/eth-usd">ether</a>, and <a href="https://markets.businessinsider.com/currencies/doge-usd">dogecoin</a>.The surge in new crypto coins came amid a massive bull market for the sector in 2021, but <a href="https://markets.businessinsider.com/news/currencies/bitcoin-price-today-below-30000-investors-shun-risky-assets-2022-5">a more than 50% decline in bitcoin</a> from its November high is challenging the space, especially in smaller coins that saw extraordinary gains last year like solana, cardano, and polkadot. The <a href="https://markets.businessinsider.com/news/currencies/terra-terrausd-luna-ust-stablecoin-plunge-do-kwon-death-spiral-2022-5">implosion of Luna and its related stablecoin, Terra,</a> has also dented confidence in the crypto space and has led to a brief depegging of Tether's <keyword id="11931191" type="UNKNOWN" weightage="60" keywordseo="stablecoin" source="Orion">stablecoin</keyword> from $1. With less liquidity and more volatility, these alternative cryptocurrencies can deliver investors massive losses or gains in a short period of time. For example, <a href="https://markets.businessinsider.com/news/currencies/the-squid-game-token-scam-website-socials-offline-coingecko-crypto-2021-11">squid game token fell 99%</a> in a single day last year after delivering swift gains of 75,000%.Keeping an eye on the weekly winners and losers can help investors identify which coins are beginning to gain and lose traction in the crypto community.These were the five worst performing cryptocurrencies with a market value of more than $1 billion over the past week, according to <a href="https://coinmarketcap.com/">data from CoinMarketCap.</a>5. ApeCoinSymbol: APE Market Value: $2.1 billion 7-Day Performance: -50.9%<div type="image" title="APECoin Price" height="401" width="761" msid="91525265" hostid="261"></div>4. CosmosSymbol: ATOM Market Value: $2.6 billion 7-Day Performance: -51.6%<div type="image" title="Cosmos price" height="395" width="758" msid="91525267" hostid="261"></div>3. Decentraland Symbol: MANA Market Value: $1.3 billion 7-Day Performance: -53.1%<div type="image" title="MANA price chart" height="398" width="754" msid="91525269" hostid="261"></div>2. TerraUSDSymbol: UST Market Value: $5.1 billion 7-Day Performance: -57.4%<div type="image" title="Terra Chart" height="398" width="752" msid="91525271" hostid="261"></div>1. <keyword id="12507550" type="UNKNOWN" weightage="60" keywordseo="terra" source="Orion">Terra</keyword>Symbol: <keyword id="12663761" type="UNKNOWN" weightage="60" keywordseo="luna" source="Orion">LUNA</keyword> Market Value: $53.2 million (lost ~$30 billion) 7-Day Performance: -99.7%<div type="image" title="Terra price" height="397" width="758" msid="91525274" hostid="261"></div>

These were the 5 worst performing cryptos over the past week amid stablecoin collapse

<ul class="summary-list"><li><keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">Crypto</keyword> billionaire <keyword id="11930691" type="UNKNOWN" weightage="60" keywordseo="sam-bankman-fried" source="Orion">Sam Bankman-Fried</keyword> ploughed $16 million into <keyword id="12244793" type="UNKNOWN" weightage="60" keywordseo="super-pacs" source="Orion">super PACs</keyword> in April. </li><li>According to Bloomberg, a hefty $10 million was donated to a pandemic-preventing super PAC. </li></ul>Crypto billionaire Sam Bankman-Fried injected $16 million into political outside spending groups in April, <a href="https://www.bloomberg.com/news/articles/2022-05-21/crypto-s-bankman-fried-gave-16-million-to-super-pacs-in-april">Bloomberg reported</a>, in the run-up to the US midterm <keyword id="11931743" type="UNKNOWN" weightage="60" keywordseo="elections" source="Orion">elections</keyword> later in the year.Of those donations to super political action committees, $10 million went to Protect Our Future, the report said, citing filings from the Federal Election Commission. The remaining $6 million went to the House Majority PAC, which has links to House Speaker Nancy Pelosi.Bankman-Fried made the donations to heading into a busy summer season of primary races. Super PACs can raise unlimited funding from backers including individuals and companies, which is then used in candidates' campaigns.The FTX chief executive's latest injection brings his total in this election cycle to as high as $31.5 million, per Bloomberg. That has ended up <a href="https://www.wweek.com/news/2022/05/04/how-oregons-new-congressional-district-could-become-a-colony-ruled-by-a-distant-crypto-prince/">funding a stream of ads</a> and other promos, leading some to <a href="https://www.politico.com/news/2022/05/17/oregon-elections-crypto-super-pac-00032960">complain that Bankman-Fried is trying to "buy" elections</a>.Protect Our Future, which says it is dedicated to preventing the next <keyword id="11896136" type="UNKNOWN" weightage="60" keywordseo="pandemic" source="Orion">pandemic</keyword>, has spent almost $24 million on campaigns in 2022, according to <a href="https://projects.propublica.org/itemizer/committee/C00801514/2022/independent-expenditures#58cf9e2c81aa0bf729d9495b9f348db10fd2f085">ProPublica data</a>. It laid out a big chunk of that — $13.5 million — to promote Democrat Carrick Flynn's <a href="https://www.businessinsider.com/oregon-congressional-primaries-kurt-schrader-primary-live-results-2022-5">bid in an Oregon primary</a>, which the former researcher in artificial intelligence lost.Crypto exchange boss Bankman-Fried has <a href="https://markets.businessinsider.com/news/currencies/sam-bankman-fried-ftx-crypto-bitcoin-scams-hacks-regulations-bitfinex-2022-2">urged lawmakers</a> to bring more federal oversight to the crypto industry, given concerns about scams. He believes that better regulation will draw more interest from institutions such as big banks to digital assets.July and August are the busiest months for holding state primaries, though the season runs from March to September, ahead of the elections across 46 states in November.Protect Our Future is not the only super PAC Bankman-Fried has given money to. He has dropped millions of dollars to other committees, including a <a href="https://www.vox.com/recode/2021/3/20/22335209/sam-bankman-fried-joe-biden-ftx-cryptocurrency-effective-altruism">$5 million</a> contribution to Future Forward, a group that supported Joe Biden's presidential campaign.He ranked <a href="https://www.opensecrets.org/outsidespending/summ.php?cycle=2022&amp;disp=D&amp;type=V&amp;superonly=N">47th</a> among top donors to outside spending groups during the 2020 election cycle and is <a href="https://www.opensecrets.org/outsidespending/summ.php?cycle=2022&amp;disp=D&amp;type=V&amp;superonly=N">27th</a> in 2022 so far, according to OpenSecrets. Read more: <a href="https://www.businessinsider.com/crypto-prices-trading-strategy-bear-market-safe-haven-dexterity-capital-2022-5" target="_blank" rel="noopener noreferrer">Retail traders are getting burned and even big players are taking a hit from tether's limited depeg, according to a crypto prop shop co-founder. Here's the 2 catalysts that could revive retail interest — and a safe haven to turn to</a>

Crypto billionaire Sam Bankman-Fried just handed $16 million to Super PACs as primaries swing into gear

<ul class="summary-list"><li><keyword id="13891032" type="UNKNOWN" weightage="60" keywordseo="terrausd" source="Orion">TerraUSD</keyword> hit a low of $0.30 Wednesday as the supposed stablecoin slid further away from its peg after confidence evaporated.</li><li>Sister cryptocurrency <keyword id="12663761" type="UNKNOWN" weightage="60" keywordseo="luna" source="Orion">luna</keyword> tumbled more than 97% as rescue efforts from Terraform Labs appeared to fail.</li></ul>TerraUSD, a major stablecoin which is supposed to be fixed at $1, tumbled on Wednesday to as low as $0.30 as confidence in the <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> project evaporated.Its sister cryptocurrency luna dropped more than 97% as rescue efforts failed to avert what analysts have called a "death spiral" that has shocked digital-asset investors.<keyword id="13898772" type="UNKNOWN" weightage="60" keywordseo="ust" source="Orion">UST</keyword> had tumbled to $0.375 Wednesday as of 9.31 a.m. ET, according to<a href="https://www.coingecko.com/en/coins/terra-usd"> Coingecko</a>, having earlier dropped as low as $0.306.Luna, which is free-floating, was down 97% to $0.869. It traded as high as $116 in April.The dramatic drop in TerraUSD and luna is a "death spiral" that could see confidence in the stablecoin evaporate entirely, analysts at research house Fundstrat said in a note.TerraUSD was the world's third-biggest stablecoin before its<a href="https://markets.businessinsider.com/news/currencies/terra-peg-dollar-luna-stablecoin-crypto-and-stokes-fears-bitcoin-2022-5"> dramatic "de-peg"</a> from the dollar in recent days.<a href="https://www.businessinsider.com/personal-finance/stablecoin">Stablecoins</a> are <keyword id="11895317" type="UNKNOWN" weightage="60" keywordseo="cryptocurrencies" source="Orion">cryptocurrencies</keyword> that are designed to trade at $1 per token, giving traders a supposedly stable place to park their cash while they trade.TerraUSD works slightly differently from tether and Circle's USD Coin, the two biggest <keyword id="11931190" type="UNKNOWN" weightage="60" keywordseo="stablecoins" source="Orion">stablecoins</keyword>, which are both backed by liquid assets. Instead, it relies on its ties to cryptocurrency luna to maintain its value. Investors can exchange one unit of TerraUSD for $1 of luna. If the price of TerraUSD slips below $1, investors are incentivized to buy TerraUSD so they can exchange it for luna and make a small profit, and vice versa when the price moves above $1. This so-called arbitrage is supposed to push TerraUSD's price back to $1.But the system has broken down in recent days as cracks have started to show in crypto assets during a period of heavy selling in financial <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>."The exact reason UST became untethered from the dollar remains unclear, but on Saturday, hundreds of millions of dollars worth of both UST and luna were rapidly sold across exchanges, pushing UST to around 98 cents," analysts at Coinbase said in a note. They added that soon "panic set in."Do Kwon, the co-founder of Terraform Labs, the group behind UST, scrambled to put together rescue plans on Wednesday but they appeared to have little effect on the assets' prices.He issued $1.5 billion of loans in UST and bitcoin Tuesday to try to encourage arbitrage investors to boost the cryptocurrencies.Bryn Solomon of crypto trading firm Mgnr.io said: "At this stage, I don't think these firms will have the risk appetite to support it. Algorithmic stables are a confidence game. Once confidence is lost, it's game over."Read more:<a href="https://www.businessinsider.com/luna-crypto-market-crash-volatility-trading-strategy-ust-terra-qcp-2022-5">A crypto trading behemoth lays out how UST remains a 'material tail risk' that could continue to send prices falling through a 3-part self-destructive cycle — and 2 ways its positioning for further volatility ahead of a key market event</a>

You Searched For "tether depeg" and got 11 results

Tether investors have redeemed $10 billion worth of the token since the crypto rout rattled faith in stablecoins

Zahra Tayeb

Stablecoin tether breaks its peg and drops to $0.95 as panic hits crypto markets after collapse of TerraUSD

Harry Robertson

Tether losing its one-to-one US dollar peg exposed its vulnerability but also showed how the stablecoin can build confidence in the future

Brian Evans

Crypto crashed this week as 2 stablecoins broke the buck. Here's what that means, and where the market goes next.

Carla Mozée

This week's vicious crypto crash shows a crisis of confidence in the entire ecosystem

Matthew Fox

A collapse of Tether could be crypto's 'Lehman Brothers moment' as the world's top stablecoin begins to wobble and major tokens plummet, analyst says

Matthew Fox

Binance's CEO tried to warn Sam Bankman-Fried: 'The more damage you do now, the more jail time.'

Zahra Tayeb

Morgan Stanley warns it's too early to be bullish on stocks — and predicts the S&P 500 will drop another 14% by August

Harry Robertson

These were the 5 worst performing cryptos over the past week amid stablecoin collapse

Matthew Fox

Crypto billionaire Sam Bankman-Fried just handed $16 million to Super PACs as primaries swing into gear

Zahra Tayeb

TerraUSD stablecoin tumbles and luna token plunges 97% as rescue attempts fail to avert 'death spiral'

Harry Robertson

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