Cryptocurrency market update: Bitcoin unresponsive as 500 million Tether (USDT) burned

The high volatility in the market warranted the creation of cryptocurrencies that maintained a relatively stable value. The coins that emerged were pegged to the US dollar, some on gold and other exchange traded commodities while others have been backed by other digital assets.

The long-standing stable coin pegged to the USD, Tether (USDT) has in the past couple of weeks experienced the worst selloff in history. The token saw its value plummet to the extent of clocking $0.93. This situation has worried crypto currency enthusiasts and investors who have been reminded that stablecoins are not that stable.

However, the developers of USDT are working hard to remedy the situation before it gets out of hand. The official blockchain data brought to light a transaction with a value of 500 million USDT. The address belongs to the treasury to an issuing address according to the company’s website. On receiving the tokens, the issuing address was made to revoke the coins from circulation. Moreover, the tokens were destroyed completely.

Tether’s market cap has been dwindling since October started following the widespread selloff by the holders of the tokens. It has been reported that 800 million USDT has been disposed in less than a month. The destruction of the 500 million USDT brings down the treasury holding from 1 billion. At press time, the treasure is holding about 467 billion USDT. A statement published by Tether confirms the burn:

“Over the course of the past week, Tether has redeemed a significant amount of USDT from the circulating supply of tokens. In line with this, Tether will destroy 500m USDT from the Tether treasury wallet and will leave the remaining USDT (approx 466m) in the wallet as a preparatory measures for future USDT issuances.”

There is a lot controversy regarding the effects of USDT on Bitcoin. The fall in October saw USDT fall to roughly $0.93. There has been a rebound to $0.988, however, this value is still below the value of the USD.

Bitcoin price market overview

The falling price of Tether was met by a rise in the value of Bitcoin (BTC) as well as Ethereum (USDT). Tether continues to surprise investors with the current swings contrary to the expected stability (at $1). Although, the value of USDT is rising again, Bitcoin remains stable amid the consolidation in the market. Bitcoin, is trading at $6,392 following a slight retreat from the broken support at $6,400. The upside has also been limited at $6,500 while the short-term support is at $6,380. More support areas are present at $6,200, $6,100 and eventually $6,000.