A panic across the crypto market early Thursday morning in Europe put the stablecoin tether (USDT)’s US dollar peg under pressure, with the token trading as low as USD 0.91 on some exchanges. The crash has led some to wonder why arbitrage traders don’t seem to want “free money.”
At the time of writing (08:50 UTC), USDT had already trimmed most of its losses, although it still remained significantly lower than its peg. On Coinbase, the stablecoin traded for USD 0.983 and on Kraken for 0.982.
Daily chart of USDT/USD on Coinbase:
At its lowest, the stablecoin touched USD 0.91 at around 07:20 UTC on Bitstamp, 9% below its peg.
5-minute chart of USDT/USD on Bitstamp:
The pressure on tether’s peg led to a flurry of speculation in the crypto community about what was going on.