The slight de-riveting of USDT (Tether) today has caused concern and panic in the market. If USDT decoupling does occur, it could have a significant impact on the cryptocurrency market. Here are some possible scenarios and their market reactions:
The project party protects the market: In the case of USDT decoupling, the project party may take measures to protect the market, such as selling the spot held in hand to maintain the value of USDT. This could trigger panic selling in the market, leading to a sharp decline in the prices of mainstream cryptocurrencies.
USDT holders turn to other cryptocurrencies: Many people may exchange their USDT for other cryptocurrencies such as BTC and ETH in an attempt to escape the uncertainty of USDT. This may trigger price increases in mainstream markets such as BTC and ETH, attracting more funds to enter.
Increased demand for USDC: The decoupling of USDT may lead to a significant increase in the exchange volume of USDC (centralized stablecoin). As market demand for stablecoins increases, USDC may become an alternative and be favored by more investors.
Collapse of DEX and OTC markets: Due to the withdrawal of large amounts of funds, many decentralized exchanges (DEX) and over-the-counter markets (OTC) may face serious difficulties or even collapse. The rapid exodus of funds may cause liquidity in these markets to dry up, further exacerbating market chaos.
Rising Blockchain Transaction Fees: Due to the large amount of funds moving away from USDT to other cryptocurrencies, various blockchain networks may see a sharp increase in transaction fees (GAS). Transaction congestion and high fees may cause inconvenience to users, but also have an impact on small transactions and fast transaction strategies.
It should be noted that the above scenarios are only assumptions, and the actual impact may be different. Furthermore, the exact nature and extent of the impact of a decoupling event will depend on the specific circumstances, and we cannot predict the timing and scale of its occurrence.