Cryptocurrencies are notably below their peak and mounting concerns about stablecoins following the collapse of terraUSD’s (UST) has led to outflows from the largest stablecoin tether (USDT), Citibank (C) said in a report Tuesday.
These concerns have most likely compounded declines in crypto markets, the report said.
“Volatility has affected user adoption,” the Wall Street giant said, noting that trading volumes and active addresses spiked around the time of the luna (LUNC) collapse, which indicates user adoption, but these increases have since reverted to previous levels, or even lower.
According to Citi, “Tentative evidence suggests a reduction in trading volumes and futures positions but not wholesale declines in investor interest in the space."
”After luna’s collapse, there were concerns about outflows in USDT, but these have since slowed," the bank said. Some flows went to the more “transparent and centralized” USD coin (USDC) stablecoin, while others exited the market...
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