If you can't read the Y-axis on a graph, and you only look at the last 7 days, then it looks like Tether has gone off a cliff.
If you read the Y-axis you'll see it's barely moved, and if you zoom the graph out, it's barely a blip compared to previous deviations in price.
Now it may well be that Tether is also heading to zero, but it's very different from the Terra fluctuations.
Check the following graphs for both 7 days and all time
1) There are an incredibly large amount of people selling Tether. This indicates low confidence in Tether, low confidence in crypto as a whole, or both.
2) Tether's price stability mechanisms are not particularly robust, and struggle to handle spikes in people selling Tether. This calls into question Tether's claims of stability.
Of course, it also may just be a momentary dip that is fixed after a few days. But the entire crypto market is balancing on a knife's edge right now, and this could be what pushes it over.
Except there have been equivalent (or worse) dips for tether in 2016, 2017, 2018, 2019 and 2020 and they weren’t the harbinger of doom for tether either.
I’m not saying that tether won’t fail, just that its recent fluctuations and ‘de-peg’ is not the same as terra (tether is basically back to normal now, terra far from it).
TerraUSD's de-peg wasn't supposed to happen and combined with Luna, it was dragged it way down fast. Knock on effect being USDT which basically sold as too big and too collateralized to fail has shown weakness in the armor.
If there's a run on USDT, you would expect it to go to BTC, ETH. Then if people start saying they want their money out all together then the run on BTC, ETH would decimate the market as a whole.
USDT will be a lot harder to take down - conversely if it falls, it'll take so much more with it.
It's stable - not fixed.
The stability of the coin allows for minor flucuation in price - these are then arbitraged out.
Today's drop is clearly an indicator of market moves, cash-outs, etc.