Could Tether be the catalyst of a crypto apocalypse?

pcgamer.com:

The cryptocurrency market has shown that it isn’t immune to wider economic issues. High cap coins including Bitcoin and Ethereum have been on a downward trend over recent weeks. But the wider economy and inflation pressure is far from the only factor influencing crypto right now. The collapse of the Terra stablecoin (UST) last week sent waves of panic through the market, with some commentators wondering if the collapse was a ‘Lehman Brothers’ moment for crypto.

But UST is just one of many stablecoins. By far the largest is Tether, or USDT. It currently sits in third place in terms of total market cap, behind Bitcoin and Ethereum. The total market cap of USDT dropped from around $83 billion on May 11 to under $75 billion as of May, according to Coingecko. This drop is reportedly due to a series of redemptions, which were redeemed for the full one US dollar value.

Tether Operations Limited, the company behind USDT, sought to reassure investors worried about the possibility of another de-pegging and bank run, which is what happened with UST the week before. The company stated on its blog that “Since May 11, Tether successfully processed $7 billion of USDT redemptions for verified individuals. Every redemption request which was submitted was redeemed in full."

Tether has faced criticism due to its lack of transparency on exactly what it's reserves are, and how much they’re actually worth. The recent Tether redemptions have served as something of a stress test. Despite some fluctuations during peak trading last week, the 1:1 dollar peg remains intact.

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