On October 15, USD-pegged stablecoin Tether fell as low as down to 93 cents, imploding around 4% in value. This saw a massive sell off of Tether and as traders shifted funds into other cryptocurrencies. As a result, Bitcoin, Ether and XRP rose around 7% (as per www.coinmarketcap.com) which left market experts and those involved in trade in a state of sublime shock.
While all analysts seem rather concerned about whether Tether is truly backed by USD, it is fair to say that nobody saw the Tether implosion coming. The sentiment over the sudden nature of its occurrence was shared by the prominent crypto analyst and Forbes Finance Council member, David Gokhshtein. He stated while talking to BlockPublisher:
We all have our theories on Tether, but no one saw this coming.
David also discussed the lack of trust put by investors on Tether before the debacle. He seemed adamant that the market has to move on from it, which will definitely benefit the space as a whole going forward. According to David, the problem Tether faces is that it hasn’t been able to create a trustworthy notion about it since the beginning. He said:
Eventually we’re going to have to get away from it. It’ll hurt in the short-term, but will benefit the space in the long-run. I’ll focus on Tether here. It’s just not trusted by half the people in the industry. That’s the problem.
When asked about whether the same prospect is in line for other stablecoins, David shrugged off the suggestion. With Tether’s dip, it was seen that stablecoins like TUSD and PAX reported better performance with the former already showing 1.5x trade volume on Binance, with most investors opting to either cash out into other cryptos or shift from Tether to other platforms. David affirmed the activity by saying:
I don’t believe other stablecoins will face this in the future.
Controversy has not been new to Tether, as it has previously been accused to have manipulated Bitcoin and other cryptocurrency prices in a publication by University of Texas professors John Griffin and Amin Shams.