Backers of Tether have repeatedly assured that the coin is backed by ample reserves and is running smoothly, but not enough to reassure the market.
The supply of USDT remains heavily liquid in Curve’s 3pool, with the token being 65% liquid as of Friday. While this proportion was only 29.9% on May 6, before TerraUSD began to de-peg, as the TerraUSD crisis worsened, this proportion soared to 82% on May 12, briefly de-pegging USDT.
Although USDT’s liquidity share has declined since then, it is still much higher than TerraUSD’s pre-crisis level. Edul Patel, CEO of crypto investment platform Mudrex, said this shows investors are cautious about holding Tether.
Short sellers have increased their bets on Tether over the past month, said Leon Marshall, head of institutional sales at Genesis.