During bearish markets, rumors tend to spread like wildfire because there’s fear already induced in the minds of people. More often than not, they’re overamplified and end up making the situation even worse. One such rumor doing the rounds on social media lately is that Tether’s commercial paper portfolio is 85% backed by Chinese/Asian papers and is being traded at a 30% discount.
The stablecoin issuer, however, condemned the same on Wednesday by issuing an official statement and asserting,
“These rumours are completely false and likely spread to induce further panic in order to generate additional profits from an already stressed market.”
Tether’s actual portfolio composition
The post went on to clarify that its current portfolio of commercial paper has been reduced to 11 billion when compared to the end of Q1’s 20 billion. In fact, by the end of this month, Tether would bring down the number to 8.4 billion.
Outlining its long-term outlook, Tether’s post brought to light,
“This will gradually decrease to zero without any incurrences of losses. All commercial papers are expiring and will be rolled into US Treasuries with a short maturity.”
Chalking out the same, the stablecoin issuer’s CTO Paolo Ardoino tweeted:
What about its exposure to Celsius and 3AC?
The back-to-back sour developments associated with Celsius and 3 Arrows Capital managed to once again cause havoc in the crypto sphere. The staking platform, as such, had halted withdrawals quite recently due to the turbulent state of the market, locking investors’ funds. The hedge fund manager, on the other hand, has been speculated of succumbed to insolvency.
Tether, reportedly, has not been directly impacted by the same. Chalking out why, the post highlighted,
“Tether has currently zero exposure to Celsius apart from a small investment made out of Tether equity in the company… Regarding the recent events impacting the Celsius lending platform, Celsius position has been liquidated with no losses to Tether.”
The stablecoin issuer also emphasized that it has no lending exposure to Three Arrows Capital and all the claims stating otherwise are “categorically false.”