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❓ A hopeless future or should Tether be saved⠀
📉 Tether fell to $0.9455 after a sharp drop in the TerraUSD and Luna tokens, which the crypto market took as a disaster signal. Volatility of stablecoins is becoming a new reality and adds arguments to opponents of digital assets.
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Stablecoins are intermediaries between fiat and tokens, their price is «tied» to the dollar (1:1). Traders buy these tokens for regular currency, which allows for crypt transactions to reduce losses from market volatility.
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Tether coins are only 10-20% secured by real money, the main reserves remain American government bonds, short-term corporate debt and some other assets. The capital of coins in circulation exceeds $80 billion, which makes it the main source of liquidity for the crypto economy. Tether is also used as an alternative to USD where access to fiat currency is restricted. That is why the market reacts very painfully to all the problems of this crypt.
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Financial crypto engineering collapsed due to a series of large seizures of
TerraUSD from Anchor Protocol: after a wave of sales,
TerraUSD fell to 10 cents, dragged Luna (up to $0.05) and actively put pressure on BTC. The blockchain of these stablecoins stopped twice as network validators sought to stabilize digital assets. The Luna Foundation Guard reserve fund (almost $3 billion in BTC and ETH) was depleted, and
TerraUSD was actively selling tokens with traditional collateral.
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Tether had no choice − it had to fall with colleagues.
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The likelihood of a global collapse of stablecoins is still considered weak, but their methods of mutual salvation can be dangerous. If the situation of violation of parity with the dollar repeats itself, panic will lead to the exchange of Tether for a dollar or other tokens, which destabilizes all types of markets. So we warn you: risks with crypt grow independently of us, and stablecoins need to be monitored especially carefully.
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Profits to y’all!