Tether CTO has addressed all the concerning issues regarding the most popular stablecoin, Tether
Tether has recently experienced a crypto crash in May-June 2022. This popular stablecoin has left a drastic impact on millions of crypto investors in the global crypto market. They suffered huge losses in their crypto wallets for the dramatic fall of Tether. It failed to ensure being a stablecoin with high stability in the highly unstable crypto market. Meanwhile, Tether CTO, Paolo Ardoino, claimed that traditional hedge funds have started a mission to harm the liquidity of the stablecoin while reducing the Tether token.
Allegations from Tether CTO against hedge funds
Tether CTO, Paolo Ardoino, has allegations against hedge funds that those are trying to instigate another storm after the sudden crash of Tether stablecoin in the crypto market. Hedge funds have started creating sufficient pressure to cause a heavy outflow. This will, in turn, create a huge impact on the liquidity of Tether. Then the mission is to invest in stablecoin at much lower prices in the crypto market.
There are rumors spreading about Tether that this stablecoin is not 100% backed as well as the management issues tokens from thin air without any evidence with 85% exposure to Chinese CP (commercial paper). Crypto investors are blindly borrowing from Tether without any over-collateralization. Tether’s CTO has addressed these issues by mentioning that this stablecoin was fighting tremendously like fire under the extreme pressure of the crypto crash in the crypto market.
Hedge funds have started shortening the stablecoin after the crypto crash as well as the tightening of policies from the US Federal Reserve regarding the increase in interest rates due to extreme market conditions including high inflation and a looming recession. The crypto crash has led crypto investors to incur losses for the sudden collapse of the algorithm-based stablecoin from a US$1 standard stable price.
Tether’s CTO is confident about these rumors from hedge funds because reports are showing Tether being a popular stablecoin fully backed with liquid assets, cash, and many other financial investments in the highly volatile crypto market. Paolo has also claimed that it is a new wave of FUD (Fear, Uncertainty, Doubt), clowns, as well as trolls in the crypto market making Tether look worst after the crash. These agents are leveraging future contracts while unbalancing the decentralized finance liquidity pools of the popular stablecoin. The unbalancing in a liquidity pool occurs when some traders want to sell a higher proportion of a cryptocurrency in the highly volatile crypto market.
Thus, as a stablecoin, Tether has committed to phase out the exposure to Chinese commercial papers and shift its place to the US Treasuries in the nearby future.
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