Tether—the largest stablecoin—destroyed a cumulative of 3 billion USDT from the Tether Treasury via two distinct burns on Thursday. Blockchain tracker and analytics system reporter Whale Alert confirmed the same.
Both the burns happened around the same time and involved 2 million and 1 million Tether tokens respectively.
On Thursday, alongside the UST fiasco, Tether too tumbled down in value. It lost its $1 peg and went on to trade at a value as low as $0.94.
Post the burn, nonetheless, the stablecoin stabilized in value and crawled up to its peg. At press time, Tether was merely few cents shy of $1 and was trading at $0.9977 on Binance.
Alongside the price stabilization, even the number of active addresses noted a recovery, indicating that things were getting back on track. From hovering around 900k yesterday, the number of active addresses stood at 1.001 million at press time.
The damage is already done though
Fear was instilled in the minds of market participants on Thursday, for one stablecoin [UST] had already depegged and lost its stable tag. So, Tether shedding value only managed to ingrain more fear, uncertainty, and doubt.
As soon as the dip begun, market participants started converting their Tether HODLings to USDC, BUSD, and other stablecoins to shield themselves from the dip. Per data from Santiment, looks like whales were the ones that instigated the USDT dump.
As can be seen from below, whale addresses HODLing between $100k to $10 million in USDT dumped their HODLings to three month low levels, making it the largest one-day sell-off in the history of Tether. Outlining the same, Santiment’s official tweet noted,
“Key whale addresses have dumped a total of $710M in $USDT today. This is the largest one-day dump from 100k to 10M $USDT addresses in crypto’s largest stablecoin’s history.”
Even though Tether has started railing back, the done damage cannot be undone. In the books of history, 12 May 2022 would definitely be marked in red.