Why is USDT trading at a discount (USDT trading discount)?
Why is USDT trading at a discount? Why is the price of USDT consistently lower t
Why is USDT trading at a discount? Why is the price of USDT consistently lower than market demand, leading to users selling off? Why does this phenomenon continue to occur? This is because the pricing mechanism of USDT is adjusted and determined by algorithms (such as Bitcoin), based on the equal quotations of the two trading parties at a certain moment. When the contract expires, the buyer pays the corresponding cost to the seller as margin to maintain the stable value of the currency; meanwhile, due to the order matching, trading volume, and liquidity pool among counterparties, a trading premium may occur.
Why does this problem arise? It is because of the lack of liquidity between counterparties, resulting in large price fluctuations. For example, if a trader is willing to exchange 1 USDT for 1 US dollar, they can choose to buy 100 USDT or short the contract with 10 BTC. Therefore, when the price of USDT remains higher for an extended period than the market supply, a significant premium will be generated.
USDT trading discount
According to reports, based on data from CoinMarketCap, the market value of the S&P 500 index dropped by more than 10% on Monday. Bitcoin also experienced a drop of approximately 5% this Friday. The exchange rate between Bitcoin and the US dollar continues to show a negative correlation. Since hitting a new low in December 2018, the S&P 500 index has risen by about 50%, approaching historical highs. In addition, Bitcoin has recently shown a trend of trading at a discount. According to insiders cited by Bloomberg, Morgan Stanley is also paying attention to the guidance issued by the U.S. Currency Supervision Bureau last week.
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