With crypto markets under pressure and more and more investors continuing to be liquidated, the market value of the largest staple coin, Tether, continues to fall.
Tether’s market value fell to $ 69.1 billion on Friday. According to CoinMarketCap, it fell to a low of $ 83.22 billion on May 5 and is the lowest level since October 2021.
Staple coins such as the Tether and the Circle USD coin are designed to maintain a stable value for national currencies and to act as a dollar alternative to crypto markets.
According to market insiders, there has been a wave of marginal calls around the crypto-trading world recently. In such situations, investors are often forced to sell liquid assets to meet the mortgage requirements for their loans.
A margin call is a request for an additional network from the lender to repay the loan from the lender. They usually occur after the value of the original network falls below a certain limit. In that case, the borrower will have to sell some other property or the loan will be dissolved to meet the new network requirement.
This is one reason why large cryptocurrencies such as Bitcoin and Ether have been under a lot of pressure lately: they are very liquid and easy to sell quickly. Bitcoin has fallen 34% in the last ten days, according to Dow Jones market data. Ether fell 41% during that interval.
“Across the board, every lender in the crypto space makes those calls, improving their own cash flow,” said Michael Safai, a founding partner of Dexterity Capital, a crypto high frequency trading company. “I do not know anyone who has not done that.”
Tether Holdings Ltd, the publisher and maintainer of Tether Staplecoin, did not immediately respond to a request for comment.