The market is starting to differentiate between stablecoins, even though these cryptocurrencies are all designed to trade 1-to-1 with fiat.
Several U.S. dollar-pegged cryptocurrencies are now trading either significantly higher or significantly lower than the greenback, reflecting investors’ perceptions of their relative risk.
Given that stablecoins are typically used as on-ramps for investors looking to purchase bitcoin or other cryptocurrencies, these premiums and discounts mean that customers may not be paying bitcoin’s “sticker price,” as listed on a given exchange or data platform.
The new, more discriminating valuations began Monday morning, when the best-known stablecoin, tether (USDT), broke its peg, falling to a low of roughly $0.87. And while the price stabilized closer to $1 over the next day or so, its market capitalization dropped significantly, indicating that tethers are being taken out of circulation.
Indeed, based on data compiled through CoinMarketCap, the market sees USDT as the riskiest stablecoin at present, paying less than a dollar for each token. At press time, the token was trading for about $0.98.
This discount may reflect longstanding doubts that the issuing company, known as Tether, has enough dollars in reserve to fully back