One of the biggest talks in the industry right now is the battle between Coinbase and Tether. It seems that the separation of stablecoin markets is inevitable with each party actively pushing their version of a token pegged by the US dollar.
With the total domination of the market, Binance looks like a strong contender to overtake the opposition eventually.
Tether is still doing quite fine. It managed to stabilize well after a huge dip caused by both the FTX collapse and Tether’s own battles with US regulators. In the end, the price reached a visible equilibrium.
Coinbase’s move is a big hit to the value of USDT
Coinbase has a massive 6.3% market share. It fell drastically over the last summer. However, this exchange is still a big player capable of affecting market prices and creating commotion when necessary.
Just a couple of days ago, Coinbase announced that it wants its users to switch from Tether to USDC. The main reason for this request is safety concerns.
Some may argue that this move is a way to return some confidence to USDC users after Binance decides to completely purge the competing stablecoin from their exchange. I
t did not affect USDC prices as dramatically as some expected, but Coinbase may be feeling pressure to support their stablecoin in a toughening bear market.
Now, Tether finds itself in a tight spot. On one hand, the company is looking good and has healthy financial metrics proven by external audits. The price is stable again.
On the other hand, the lack of their own exchange to rely on may cause liquidity issues if more and more CEX platforms start rejecting USDT in favor of other stablecoins in the market.
We have seen a stablecoin collapsing
Reminding readers about Terra Luna is not a sign of good manners. Our collective wound is still fresh. However, Tether also lost confidence on several occasions with the price dipping to as far as $0.9491 back in May.
Another dip happened recently when the price dropped to $0.9751. Something like this can happen during the next week.
James Thompson