As TerraUSD [UST] careens out of control, is Tether [USDT] headed the same way

ambcrypto.com:

When the market crashes, investors usually watch Bitcoin with frantic eyes – but everything is different this time. A Terra-fying saga is in progress, which saw Terra [LUNA] lose more than 95% of its value in a day to trade at $0.1194 at press time. If that wasn’t painful enough, the stablecoin TerraUSD [UST] was changing hands at $0.6079 around press time.

However, many investors had one question on their minds – is it catching?

Questions about its backing aside, Tether [USDT] was considered a relatively stable stablecoin, so to speak, thanks to a market cap that put it right under Ether [ETH]. However, as FUD surrounding UST grew, it seems that USDT was also struggling to hold on to its peg.

At press time, USDT was trading at $0.9809 after falling by 1.89% in the last day and slipping by 1.91% in the past week. This sent waves of panic through the crypto and DeFi communities, even as Tether CTO Paolo Ardoino tried to reassure users by tweeting that millions of dollars had been redeemed at the dollar price.

— Paolo Ardoino (@paoloardoino) May 12, 2022

So, Ardoino may believe that all is well, but what do the metrics say?

A look at the balance of USDT on exchanges tells us that USDT has been exiting since about 6 May – even before the price crashed. However, 9 May saw millions of USDT returning to the exchanges, before being taken out again. This took place as USDT’s price fell below $0.99.

Source: Glassnode

During confusing times such as these,  it can help to look at USDT’s market cap. As expected, the market cap had fallen and at press time, was around