Tether, the third-largest cryptocurrency by market capitalization, has assured its community members that its reserves are holding firm. The team found it necessary to calm investors’ nerves following the Celsius network saga.
Distress for the Celsius Network, But Tether Still Holding Up Well
Tether has a broad investment portfolio, with the Celsius native token being one of its investments. About a day ago, the Celsius network informed investors and community members that it would pause withdrawals due to catastrophic events.
The Celsius network had used funds from multiple sources to invest in an array of crypto protocols. LUNA, now LUNC, was one of these investments and stETH in Lido pools. However, the downfall of LUNA and the crash in the price of Ether have exposed the network to a huge loss. At the moment, the losses incurred imply that all investors cannot get a payout.
Following the disaster, the CEL token lost about 56% of its value yesterday. Crypto investors have been concerned about the Celsius network and all institutions associated with the network investment-wise.
The panic incited the Tether team to release a circular on its website and social handles, assuring investors that the Tether token is unaffected. In the circular, Tether stated its Celsius investments and the stability of its stablecoins or reserves. Tether’s statement also emphasized that Tether’s lending with Celsius was over collateralized, exposing the company to little or no risk in the case of Celsius facing a liquidation.
Although the company is widely known for its stablecoin pegged to the United States dollar, Tether also hosts other stablecoins. The EURT in Tether is pegged to the Euros, XAUT in Tether is pegged to Gold, and CNHT is pegged to the Chinese Yuan.
Tether currently has 71 billion dollars backing the USDT, while the EURT and CNHT are backed by 236 million Euros and 20 million Yuan, respectively.
