I very much don't understand how markets and order books work, but people who do understand those things tell me pretty consistently how big of a deal it is when a money market fund loses its peg, even by a tiny amount.
USDT maintains its peg by allowing certain entities to redeem USDT 1 to 1. How much USDT's price fluctuates depends on how well that mechanism works, and market conditions.
By claiming certain entities can redeem 1:1. No one has ever documented a Tether redemption. They have a very tiny number of clients and the terms say they don’t have to redeem at all.
No there was a $10 billion market cap reduction. The exchange rate on Tether’s owned exchange, Bitfinex was $1 most of the past week where it was less elsewhere. Likely Tether was using open market operations to trade dollars for Tethers and keep the rate up.
Documenting a redemption would involve using the official redemption mechanism where you redeem $100,000+ at a time, pay a $100-$1000 fee, get a wire transfer from Tether etc. If you can find anyone ever documenting having done that, let me know
