Tether FUD has been going crazy for weeks now, including Federal government investigations, Tether ban, and much more. However, new claims call it ‘False FUD,’ which is affecting stablecoin for nothing. The Tether market cap dropped around $2B over the week, but a few people are concerned that things could worsen with Europe’s MiCA regulations. Let’s discuss what the fuss is all about.

Europe Ban News Drops The Tether Market Cap By $2B

Tether (USDT) is the biggest stablecoin and ranks third among the top cryptos after Bitcoin and Ethereum. This position is thanks to the Tether market cap of $138.71B, which has dropped around $2B over the week. This came after the USDT’s price dropped to a two-year low at $0.997.

Eventually, the news of Europe’s Tether ban led to the delisting possibility of the stablecoin from all of Europe’s centralized exchanges, as USDT failed to comply with the new MiCA regulations. According to that, stablecoins require an e-money license to trade on crypto exchanges.

Notably, the last date to make that happen is December 30, 2024. This failure will lead to the delisting of the USDT from all the euro’s exchanges, threatening its position in the crypto market and creating liquidity issues that could also affect the rest of the cryptos.

Why is it called A Tether False FUD?

Recently, a FUD was built around the USDT, which involved institutional and trader claims. One has called Tether a $118B scam, whereas the other called it ‘the standard for the darkest transaction.’ More importantly, many believe that the ban is a good thing, severely impacting Tether market cap. However, most people missed the point that USDT is not illegal after this. Instead, the traders cannot trade it on MiCA-complaint exchanges. Even after the Tether ban, people can keep it in non-custodial wallets and trade it in decentralized exchanges.

Moreover, Bitcoin enthusiast Samson Mow has provided insights into the delisting and Tether FUDsters. According to Mow, only one crypto exchange, Coinbase, will delist the USDT in the short term for European users, debunking the Tether ban news. More importantly, he revealed that there is a 12-month grace period for Europe’s local regulators to take action on this.

Similarly, another crypto enthusiast questioned the integrity of these FUDsters. He described that stakeholders and corporate investors have gained a massive stake in the USDT’s biggest competitor, USDC. This eventually pointed to centralized or traditional financial issues. However, as Tether claims to be owned by Bitcoin stakeholders, it promotes a much better-decentralized philosophy. He argues that “Bitcoiners own Tether, and their incentives are aligned with BTC,” making it better for the crypto community.

Overall, his analysis questioned the Tether Fake FUDster, who is projecting a negative image, impacting Tether market cap, when they have their own issues.

Will USDT’s Suffering Continue?

The impact of the Tether FUD is clearly visible in its price and market cap. However, the Tether CEO has ignored it like many, calling it the ‘False FUD.’ Earlier, he even commented that the FUD is bullish (FUD = rocket emoticon). Interestingly, USDT has not found itself in controversy for the first time, as it has happened multiple times when this stablecoin continuously gets into regulatory issues.

Even back in 2022, when FTX, which is about to begin the FTX claims payout, collapsed, the USDT’s value depegged from dollar to as low as $0.93 but did recover. More importantly, Alex Bitblaze revealed that 80% of USDT’s market cap comes from Asia, so the delisting would not have a major impact. Eventually, he called Tether false FUD the buying opportunity.

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But Axel, what about USDT trading volume and the depeg?

USDT is the largest stablecoin, with a market cap of $138.5B and a daily trading volume of $44B

As of today, 80% of USDT’s trading volume comes from Asia, so the EU delisting won’t have any severe impact. pic.twitter.com/NjxB2iVLhe

— Axel Bitblaze (@Axel_bitblaze69) December 29, 2024

What To Do With Tether Market Cap Drop?

Amid the Tether false FUD, the Tether market cap has dropped around $2 Billion. However, considering the FUD, the stablecoin is handling pretty well on the charts. More importantly, recent revelations about the limited delisting in Europe will likely boost holder’s sentiments. Eventually, many crypto analysts claimed the impact of all this was limited to crypto, asking investors to stay worry-free. More importantly, they have called it the buying opportunity, where investors should focus on buying rather than worrying about an asset that is the biggest and most used among crypto users.

The post Tether Market Cap Drops $2B Amid “False FUD” appeared first on CoinGape.

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Filed under: News - @ December 30, 2024 3:22 pm