a new blog post van Tether has revealed that hedge funds that short USDT lose money.
According to Tether, USDT shorting peaked in the past two months as Terra imploded and the broader crypto market crashed.
According to the report, the short positions were fueled by the belief that Tether’s USDT could also follow in Terra’s UST footsteps by imploding as well.
However, while the stablecoin is short depegged on some crypto exchanges because of the broader market troubles, it has managed to regain and maintain its peg to the US dollars, while also honoring redemptions of more than $14 billion over the same period.
According to Tether, the short positions against the asset showed the level of fundamental misunderstanding that people, including investors, have about the industry.
Traders Desire to Earn USDT
The blog post said the hedge funds that short USDT have provided an opportunity for those taking long positions on the asset “to step in and collect funding from the other side of this trade.”
It went on to say that the hedge funds believe they have “found a risk-free way to short crypto”, which is not entirely true.
Tether revealed that if there were not “enough USDT desires intervening to collect funding, this percentage would be much higher. These traders have shown that they are more than willing to be long USDT and collect the fees that are paid by hedge funds that go short.”
Tether vs Competition
The stablecoin company also touched on the subject of increased competition within the space.
According to the company, a clearer picture of the competition between USDT and its competition can be seen in the 24-hour trading volume of both.
Per Tether, USDT’s trading volume is about 10x that of its closest competitor. The company went on to say that this figure points to the usefulness and adoption of USDT.
A recent Arcane research report had: predicted that USDC would supplant USDT as the dominant stablecoin in the market by October.