Tether (USDT) lost value against the dollar during the cryptocurrency’s massive price drop in May, resulting in a significant drop in the market value of one of the most used stablecoins.
Tether (USDT) market cap was slashed by more than $10B in May
Tether (USDT) remains the largest stablecoin by market cap as of June 2022. Despite losing its peg, stablecoin remains among the top five digital assets by market capitalization. Tether ended the fifth month of the year with a market capitalization in the region of $72.5 billion. This is a 12% drop from the market cap on May 1. On that day, USDT had a trading volume of $61.42 billion, representing a market cap of approximately $83.16 billion.
The negative crypto market sentiment led many retail and institutional investors to dump digital assets around May 9. This had a huge impact on the USDT market capitalization. The drop in investor interest in May was attributed to unfavorable geopolitical events; a stronger dollar, renewed interest in precious metals such as gold, and rising interest rates have increased demand for government bonds and bills. In May, the large number of USDT-related transactions reached a high of 19,510 at $0.9747 on May 12.
This corresponds to a massive trading volume of 31.8 billion USDT at the same price.
A trading volume of 31.8 billion USDT multiplied by $0.9747 equals $31 billion. USDT opened May 12 with a trading price of $0.9959, reached an intraday high of $0.9977, tested an intraday low of $0.9485, and closed the day at a $0.9976.
Trading volume is around $141.05 billion and corresponds to a regional market cap of $81 billion. This is a 2% drop in Tether’s opening day market capitalization. Due to the bullish market bearish bias in the last two weeks of the month, USDT could not regain its pegged rate to the dollar for the rest of May.
USDT opened May 1 at $1, hit a monthly low of $0.9485 on May 12, and closed the month at $0.9994. This equates to a 0.06% drop between Tether’s opening and closing prices in May.
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