Hedge funds that decided to short USDT after the Terra collapse “at a fundamental level are notunderstand the principles of the cryptocurrency and Tether market. This was stated by the issuer of the "stable coin".
Tether Limited responded to a WSJ podcast discussing USDT collateral concerns and the rationale for shorting it.
For the first time about the popularity of such an idea, the publicationreported in June. At that time, the company's technical director, Paolo Ardoino, said that the company had processed the conversion of 7 billion tokens into fiat (~10% of total assets).
On June 18, the website of the stablecoin issuer was subjected to a large-scale DDoS attack. Then the CTO of the issuer ruled out the impact of the incident on the ability to redeem positions in USDT.
“Hedge funds’ view of the collapse of Terra asA constructive factor for shorting Tether is an asymmetric knowledge gap between cryptocurrency market participants and traditional financial institutions,”— representatives of the issuer wrote.
Among other "unreliable reasons" for such actions, the company named:
- emission of USDT “out of thin air”;
- significant investments in commercial paper by Chinese companies, including troubled real estate developer Evergrande;
- “provision of unsecured loans to third parties”;
- distrust of the thesis about 100% security of the issued "stable coins" and its high liquidity.
Recall that in mid-May, USDT deviated from its peg to the US dollar, testing the level of $0.94, but later returned to parity.
Earlier, Tether promised to completely reset the share of commercial paper in reserves no later than November. A year ago, their volume was estimated at $30.8 billion against the current $3.7 billion, according to Ardoino.
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