Tether’s USDT experienced a deviation from its dollar peg in the early hours of June 15, dropping to $0.9979, as reported by CryptoSlate. This situation presented an opportunity for some traders to profit by shorting USDT and engaging in arbitrage trades.
The price deviation was attributed to unusual activity in DeFi liquidity pools, specifically on Uniswap and Curve, where aggressive selling of USDT led to imbalanced pools.
A closer examination of Curve’s 3pool, the largest liquidity pool on the DeFi protocol, revealed a significant imbalance in USDT, accounting for 73.2% of the reserve. USDC and DAI made up the remaining 26.79% balance at the time of writing. Delphi Digital, a blockchain analytical firm, noted that this concentration of USDT within Curve’s 3pool was the highest recorded since November 2022.
Despite these concerns, Tether’s Chief Technology Officer, Paolo Ardoino, reassured users that the company was prepared to honor redemptions. Ardoino stated that Tether was ready to face any potential attacks, emphasizing their resilience in uncertain market conditions. In 2023, Tether’s market cap had actually increased, reaching a new all-time high and adding over $16 billion.
Recently, Tether expanded its business into Bitcoin mining and expressed intentions to invest its profits in BTC. However, the uncertainty surrounding USDT has led to a net outflow of over $200 million from its market cap during early trading hours, as reported by CryptoSlate.
Given the prevailing uncertainty, traders are capitalizing on the situation by making opportunistic bets against USDT. CZSamSun, a trader identified by blockchain data analytics platform Spot on Chain, borrowed 31.5 million USDT from AaveV2 and exchanged it for 31.8 million USDC at a rate of $0.9978. On-chain analyst Lookonchain corroborated this information, highlighting additional transactions by CZSamSun involving borrowing USDT and depositing USDC. Another trader borrowed 50 million USDC from Aave after the USDT depegging incident and initiated purchases of USDT. Furthermore, 0xScope observed that another large-scale trader had deposited USDC into Aave V2 and V3 to borrow USDT, with the profit stemming from arbitraging the different interest rates between the Aave V2 and V3 protocols.