It seems that the problems for the USD pegged stablecoin aren’t over.
The issue that caused a mass trigger in investment diversion recently; falling of Tether price below a dollar value, has happened again. This time, Tether dropped as far as 94 cents.
Fortunately for Tether, the crash was short lived, Tether quickly regained strength and regained original value. It even crossed the dollar mark for a few moments before crashing back to 99 cents.
Tether has not been itself for almost weeks now. The stablecoin keeps experiencing crashes. The negative vibes that emanate from the [short lived] crashes are keeping investors away from the it. The media went as far as to tag Tether as ‘the unstable coin’ owing to the disturbing falls and gains that shouldn’t be a part of the coin’s graph.
A few things are quite persistent in Tether’s falling. Firstly, Tether’s reputation itself is the biggest hurdle in the stability of the coin. The 1:1 ratio the company has promised investors sounds good on paper but Tether hasn’t been actually able to prove that the company owns enough assets to keep authorizing Tether. The company has been quite secretive of their safe stash and audits are having a hard time getting into the vaults.
Secondly, Tether kept it’s value from falling successfully until it was one of the few stablecoins. Now, a ton of alternative stablecoins have made their way into exchanges that promise stability and they actually keep the promise. TrueUSD, USDX, Havven and Basecoin are just a few from the top of the list.
No one wants to sell for a loss. Tether is making it hard for investors to harvest profits off the stablecoin category. Previously we saw how investors went into a furious backout and crashed the tether stock, if Tether keeps on falling, the name it has built for itself in the crypto-sphere could be wiped out.