Are people riding out the cryptocurrency slump in USDT Tether?
As other crypto prices fall, USDT Tether's pegging to the US dollar seems to be attracting attention.
Against the backdrop of a slumping cryptocurrency market, the value of the USDT Tether cryptocurrency has risen marginally and is now worth about US$1.03, according to CoinMarketCap. This is notable because the defining feature of the USDT is that it's always worth a dollar.
A likely explanation is that people are swapping their cryptocurrencies for USDT Tether to ride out the currently dropping market. Being pegged to the US dollar means its value remains largely the same even when the prices of everything else drops.
You can see it in action by looking at the correlation between the prices for bitcoin and Tether and their trading volumes.
This is to be expected on exchanges where Tethers are the usual medium of exchange. Bitcoin sold there will often be converted to Tethers on their way to other coins, and most people won't be able to sell their bitcoin (and drop its price) without conversion to Tethers.
You can see this by looking at bitcoin's price history next to the trade volume for Tether. Any major dip in bitcoin is associated with an increase in Tether trade volume. What makes this occasion different is that people apparently aren't converting their Tethers to another currency. Instead they're just holding those coins for now, resulting in the unusual Tether price increase.
At the time of writing, Tethers are showing on CoinMarketCap as the fourth-most traded coin with about $6 billion shifted in the last 24 hours. This is several times its $1.66 billion market cap, so most of these Tethers are still being passed around quickly as the medium of exchange, but it looks like enough are being held for the prices to ride high.