USDT Depegs as Crypto Lender Celsius Network Suspends Transactions

USDT Depegs as Crypto

USDT stablecoin dropped as low as $0.9975 on Tuesday after Celsius Network announced that it would stop withdrawals and transfers for its users.

Terra’s UST algorithmic stablecoin depegged in May, causing a domino effect in the cryptocurrency space that saw native LUNA tokens collapse to zero.

GlobalBlock analyst Marcus Satiriou opined that a possible collapse of USDT would be disastrous, unlike Terra’s UST stablecoin.

The sentiments were echoed by Sussex University Finance professor Carol Alexander, who said that Tether’s stablecoins were behind the BTC bubble and a collapse would affect the latter.

Tether was one of the first investors in Celsius Network, which has now blocked withdrawals, swaps, and transfers. The lender has also blocked customers’ accounts after BTC plunged almost 20% during the weekend.

The stablecoin issuer, which does not currently have an investment in Celsius Network, adds that events around the lender and its native CEL token resulted from market volatility.

Stablecoins have their value pegged to other assets like fiat currency or gold. The peg is intended to guard against volatility.

Source: Markets Insider

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