In accordance with the new Markets in Crypto-Assets Regulation (MiCA) in the European Union, some European cryptocurrency exchanges have decided to delist the stablecoin Tether (USDT). This delisting is scheduled to take place by December 30, 2024.
These regulations aim to enhance transparency and protect investors in the cryptocurrency market. Without the necessary permits, regulated exchanges will have to remove USDT from their platforms before this date.
It is a stablecoin that is considered among the largest digital currencies in terms of market value and the most stable. This action is attributed to Tether’s incompatibility with new regulatory rules in the European Union, known as the Markets in Crypto-Assets Regulation (MiCA), which aims to impose strict standards on digital assets to ensure investor protection and prevent illegal activities.
⬅️Is the currency depreciating?
Delisting a currency from certain exchanges does not necessarily lead to an immediate drop in its value, but it can have negative effects in the short term, especially if the delisted exchanges represent a large percentage of trading volume.
⬅️. Effects on value:
If liquidity decreases due to reduced trading in the currency, this may lead to large price fluctuations.
Investors can lose confidence in a currency if they believe that regulations or restrictions threaten its future.
⬅️. Tether (USDT) Coin Status:
Tether is a stablecoin, so it is supposed to maintain its value close to $1 because it is backed by assets.
Its value may be slightly affected if major investors pull out or if there is significant selling pressure, but it is usually less volatile than other currencies.
⬅️The impact of this on investors:
1. Less liquidity:
It may become difficult to easily buy or sell the currency, especially for investors in regions affected by the delisting.
2. Potential losses:
A decrease in demand may cause the value of assets held by investors to decline, causing losses.
3. Risks of trading outside major exchanges:
If investors turn to less reliable or unregulated platforms for trading, this may increase the risk of fraud.
4. Psychological impact:
Negative news may cause panic among investors, leading to selling waves that increase pressure on the currency.
⬅️What should investors do?
News monitoring: Keeping track of regulatory developments and ensuring that the currency continues to meet market requirements.
Portfolio diversification: Reducing risk by investing in a variety of assets.
Planning ahead: Consider moving assets to stable and secure platforms or wallets before the delisting date in the countries concerned.
Consulting experts: If the investment size is large, it may be wise to consult a cryptocurrency market expert.