%Tether ($USDT), the largest %Stablecoin in the world, has lost its peg to the U.S. dollar amid heavy selling pressure.
Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar or the price of gold.
Data shows that investors have been selling Tether and moving into other popular stablecoins such as USD Coin (USDC) and DAI (DAI) in recent days
Tether is currently trading at $0.996788, down 0.4% over the last 24 hours due to the heavy selling, according to data from %CoinGecko.
Ideally Tether should trade 1:1 with the American currency. Losing its peg to the greenback can lead to escalating concerns and selling among investors, worsening the situation.
Last summer, rival stablecoin TerraUSD completely collapsed after losing its peg to the U.S. dollar.
The selloff in Tether comes amid questions about whether the stablecoin has enough reserves to support its U.S. dollar peg, as well as the quality of its asset base.
The current selling also comes days after Tether saw its market capitalization hit a record high or $83.2 billion U.S.
Data from Glassnode shows that Tether currently controls 65% of the market for stablecoins, making it the most widely held digital asset that’s pegged to the U.S. dollar.