Following a contentious month for the embattled stable coin, Tether, the issuer of USDT, has destroyed 500 million units of the cryptocurrency. The retraction of these units comes as USDT’s market cap is gradually declining, and as its price is stuck under the ever so important $1.00 figure.

Tether published a statement on October 24 regarding the destruction of the units, explaining that:

“Over the course of the past week, Tether has redeemed a significant amount of USDT from the circulating supply of tokens. In line with this, Tether will destroy 500m USDT from the Tether treasury wallet and will leave the remaining USDT (approx. 466m) in the wallet as a preparatory measures for future USDT issuances.”

The announcement further notes that the process of destroying redeemed units has been consistent since the project was first released, explaining that:

“Conceptually, the Tether issuance and redemption process is outlined in the Tether whitepaper, with issuances and redemptions visible through observing the Tether treasury balance on the OMNI blockchain.”

In the weeks prior to the announcement regarding the destruction of these units, USDT faced incredibly unusual trading activity, falling as low as $0.87 before climbing back to its current price of $0.98. This unprecedented price drop was a direct result of a sharp decline in the stable coin’s market cap, which stemmed from people redeeming their units.

Following the price drop, Tether’s market cap fell from $2.8 billion to lows of $1.9 billion before spiking back to $2.5 billion after the company's latest announcement.

It can be presumed that the proceeds resulting from a significant amount of USDT being redeemed have been moved into other stable coins, like Gemini Dollar (GUSD), who recently saw a significant price pump.

A short time after the Tether debacle, GUSD saw a surge of funds that temporarily pushed the price to nearly $1.20, before quickly falling back to its intended price of around $1.00.

As the amount of stable coins available to investors increases, it is likely that many of them will begin to falter, with the best rising up and facing the highest rates of widespread utilization by cryptocurrency investors.