USDT Depeg Scare: Tether Falls to $0.93 During Flash Crash

A Tether $USDT flash crash saw the stablecoin briefly depeg to $0.93 on Binance, causing mass hysteria and billions in trades. The incident occurred during a surge in redemptions—over $1.8 billion was cashed out in under an hour. Analysts suggest that a whale attempting to convert large amounts of USDT into Bitcoin (BTC) may have triggered the imbalance. Tether CTO Paolo Ardoino denied insolvency rumors, calling it “coordinated FUD,” but failed to provide immediate proof of full backing. Competing stablecoins like USDC and DAI gained market share in the chaos. Ethereum gas fees soared due to panic swaps. The crypto market dropped by $95 billion within minutes. If USDT’s stability is compromised long-term, it could collapse the DeFi ecosystem. Can Tether survive another shock, or is this the prelude to a catastrophic stablecoin crisis?