As the price of bitcoin and other prominent cryptocurrencies has dropped dramatically in recent days, a central type of token used by traders — called a stablecoin — has also begun to lose value, sparking broad questions about the viability of cryptocurrency as an asset class. Days after one of the largest stablecoins, called terraUSD, started to drop in value, a second stablecoin has shown a similar sign of weakness.
Tether, the world’s largest stablecoin, had a market capitalization of more than $82 billion on Sunday. Since then, the value of one tether dropped from its designated benchmark of $1 to 95 cents at 12:24 a.m. PT on Thursday. This follows the trajectory of terra, which “lost its peg” to the US dollar on Monday and has shed most of its value since then.