CandleFocus

Tether investigation FUD wipes out $1B in open interest with latest market flash crash

Author: Content Editor
The news of a potential investigation into Tether, Inc. caused a market-wide crash, impacting the prices of cryptocurrencies such as Bitcoin and Ethereum. Tether's stablecoin, USDT, dipped slightly to $0.99, within its usual range of fluctuations. In response to the crash, altcoins and tokens lost less than 5% but quickly started climbing back up. The downward price move led to the liquidation of over $1 billion in BTC open interest and a drop in the crypto market cap of about $5 billion in less than an hour. Despite concerns, traders viewed the Tether news as a minor event and saw it as a last attempt to shake down the market before a renewed rally. The market reaction also had implications for DeFi on Solana, causing failed transactions and liquidity issues temporarily. It is believed that the Tether news may have opposite effect and could lead to a weekend BTC rally. Overall, Tether has survived previous investigations and lawsuits and continues to be compliant with authorities. However, there are concerns about its user verification process and the lack of oversight in its use on multiple networks.

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