USDT Stablecoin Briefly Dips Below $1 as Financial Document Disclosure Looms

Crypto’s largest stablecoin, USDT, fell below its $1 peg on Tuesday before Tether, its issuer, tried to front-run a potentially damning news article.

USDT dropped to as low as $0.994 on June 14, the lowest since April 26, before bouncing back to $0.999, according to CoinGecko. The dip sent ripples through the crypto market, which was already on edge.

Tether, the company which issues USDT, said in a blog post that CoinDesk, a crypto news publication, obtained documents today about the stablecoin issuer’s quarterly reports.

The publication received the documents from the New York Attorney General’s office, courtesy of a Freedom of Information request, said Tether.

"Nothing to Hide"

Tether said the documents should debunk any concerns about the assets backing USDT, but it also suggested the reports may reveal a previous hole in the stablecoin’s backing.

“The materials are outdated and do not accurately reflect the present state of our reserves, nor do they account for the transformative changes in our ecosystem,” the company’s post says, adding that it has “nothing to hide,” and that it would look for signs of “market manipulation,” like those of the mass selling of USDT yesterday which caused ripples of fear in the crypto community.

“We find it suspicious that today’s attack on USD₮ via both DeFi and centralized exchanges occurred on the day that materials were handed over to CoinDesk,” the post said.

3pool Sales

3pool, an assets pool on the Curve Finance exchange which holds three of the largest stablecoins, shows investors were trading USDT for DAI and USDC, according to Dune Analytics.

Zooming out however, the level of fear isn’t as dramatic as in March, when the collapse of Silvergate and Silicon Valley Bank , caused investors to  pull all but 2.1% of the USDT from Curve’s 3pool. At the time USDC, crypto’s second largest stablecoin, dropped to as low as $0.966.

USDT has dominated the stablecoin market in 2023, gaining over $17B in market capitalization this year to reach over $83B. USDC has bled since its de-peg in March, and is down nearly 40% to a market capitalization of $28B.