The Terra USD crash did not go unnoticed for other stablecoins pegged to the US dollar. Thus, hedge funds oriented to the cryptocurrency market are seeking to intensify the sale of Tether. The total amount of available offers is hundreds of millions of dollars.
Rates against USDT started to rise after the fall of UST. According to a report published by the WSJ, there was an increase in the frequency of short trading by traditional hedge funds using the Genesis Global Capital service in the previous month.
There has been a real spike in the interest from traditional hedge funds who are taking a look at tether and looking to short it.said Leon Marshall, the head of the company’s corporate sales team.
According to Genesis representatives, the transactions’ participants are mainly European and American hedge funds. The second party is crypto organizations, a significant part of which is located in Asian countries.
Individual investors have expressed concerns about Tether over the past year. However, the cryptocurrency was targeted by hedge funds shortly after the UST crash. The collapse of TerraUSD slightly undermined the stability of USDT, but it quickly recovered, preventing a new round of panic among crypto market participants.
Reasons for the confrontation
According to Leon Marshall, the negative attitude of hedge funds towards USDT was formed due to two key factors:
Reserves are a separate resonant topic that is surrounded by numerous rumors. The New York State Prosecutor General’s Office and several short sellers have declared misrepresentations of some of the information provided by Tether when describing assets.
Tether didn’t recognize or refute the prosecution’s accusations and called the sellers’ comments false rumors.
