How to Read the Stablecoin Peg

Last week's article ended on a number most dashboards leave out: Tether's own dollar price. Binance quotes bitcoin in USDT, Coinbase quotes it in dollars, and the gap between them turned out to be mostly the gap between USDT and a dollar. So this week the stablecoin is the subject. What does a token that's supposed to be worth a dollar actually trade at, and what does it look like on the days it isn't?

The data is exchange prices, and the exchanges are chosen for their dollar leg. Kraken has run a USDT/USD market since 23 March 2017 — the longest public record of Tether against a real dollar — and USDC/USD since 2 January 2020. Coinbase opened USDT-USD on 4 May 2021, which gives 1,966 daily closes. For the days that mattered, the hourly candles are rebuilt from Kraken's trade-by-trade tape.

What the number measures

A stablecoin is a token its issuer promises to redeem for a dollar. The peg is not that promise; it's the price the token fetches on an exchange from someone who wants it now. Most of the time the two are the same to within a few hundredths of a percent, because anyone who can use the issuer's window will buy the token below a dollar and redeem it, or mint it at a dollar and sell it above. The peg is what's left after those people have done their work — and on the days they can't, or won't, it's the price of getting out.

Two things about the number. First, it's quoted in basis points because it's small: a reading of −5 bp means the coin traded at $0.9995. Second, it's a price on a venue, not a fact about the coin. On 12 May 2022 Tether's worst hourly close was $0.9719 on Kraken, $0.972 on Coinbase and $0.9980 on Bitfinex, in the same hour. Each venue's number is right for the people trading there. That's why the tables below name the exchange every time.

Finding 1: the normal band is ten basis points, and it tightened

In 2017 Tether was a coin that sometimes traded near a dollar. One week in ten closed within ±10 bp; the middle 90% of weeks ran from −540 bp to +186 bp, and 14 of 41 weeks closed more than 1% away. 2018 was little better: 9 weeks beyond 1%, a median of −7.5 bp, and the worst close in the record. Then the band closed. From 2021 to 2025 between 17 in 20 and 19 in 20 weeks closed within ±10 bp, and no week has closed more than 1% from par since 2020.

Daily, on Coinbase, the modern band is tighter still. Since 4 May 2021 Tether has closed within ±10 bp on 89% of days and within ±25 bp on 99.3%; its median absolute deviation is 3.1 bp, and it has never closed a day more than 1% from a dollar. USDC is the tighter coin: within ±10 bp on 99.8% of days, a median absolute deviation of 0.9 bp, and one day beyond 1% — 11 March 2023, which has its own section below.

This year is the loosest since 2022. Tether's 2026 median on Kraken is −5.9 bp, only 68% of weeks have closed within ±10 bp, and just 16% have closed above par; on Coinbase the daily median is −5.2 bp and 84% of days are below a dollar. Nothing has broken — every one of those closes is inside ±25 bp — but the coin has sat a few basis points under a dollar for nine months, and finding 2 is about why.

Finding 2: the peg leans the way the crowd is running

Look down the last column of the year table. Tether closed above par in 70% of 2020's weeks and 79% of 2021's — the bull market — and in 44% of 2022's and 16% of 2026's. A premium is the queue at the mint: traders want more USDT than exists to buy crypto with, and they'll pay a few basis points over a dollar rather than wait for Tether to print it. A discount is the queue at the redemption window, where getting out costs a fee and a day.

Sort the 1,966 days by what bitcoin did in the month before each one, and the peg lines up with it. After the worst fifth of months, Tether's median is −1.4 bp and it's above par on 37% of days; after the best fifth, +2.9 bp and 82%. The correlation between the prior month's return and the day's deviation is 0.30. Read from the right, there's nothing: the month after a top-decile Tether reading averaged −1.3%, after a bottom-decile reading −0.7%. The peg is a thermometer for the crowd that just moved, which is what last week's article found for the premium built on it.

Finding 3: the breaks, hour by hour

Three times in nine years the peg has broken by more than a few percent on a venue with a real dollar leg, and each break has a different shape. The table is in hourly closes, timed from the worst one.

15 October 2018 was a bleed. Tether had already been under $0.99 on Kraken for most of a week when the Monday came — the first hourly close below it was 17:00 UTC on 9 October 2018, and 133 of the hours between then and the low closed under it — as Bitfinex's dollar withdrawals stalled and a bank in Puerto Rico was reported to be the reserves' home. At 06:00 UTC it traded at $0.85 and closed the hour at $0.8618; it spent 18 hours below $0.95 and closed below $0.99 in 335 of the fortnight's 336 hours. The week closed at $0.9571, 7 weeks in the quarter closed under $0.99, and it took 9 weeks to close a week within 25 bp of a dollar again. The worst weekly closes in Kraken's record are older: $0.9201 on 20 April 2017, when Wells Fargo cut Tether's banking off. That one took 4 weeks.

12 May 2022 was a spike. TerraUSD, an algorithmic stablecoin with nothing behind it but its sister token, had closed on Binance at 0.9998 USDT on 6 May 2022, 0.754 on 9 May 2022 and 0.246 on 13 May 2022, its last day listed. On the Thursday morning the scare reached Tether. Kraken's first hourly close under $0.99 was 05:00 UTC; the low was $0.92 at 07:00 UTC, Coinbase's $0.941 in the same hour; the worst hourly close was $0.9719. It closed under $0.99 for 6 hours and was back above it 5 hours after the worst close. On Coinbase's daily series the whole episode is a −40 bp close that took 19 days to get back within 10 bp. Tether honoured every redemption that week; the price on the venues where people were selling didn't wait to find that out.

11 March 2023 was a weekend. Silicon Valley Bank was closed by regulators on the Friday with $3.3bn of USDC's reserves inside, and Circle said so at midnight. Kraken's first hourly close under $0.99 was 03:00 UTC; the low was $0.874 at 07:00 UTC, and the worst hourly close $0.901 at 12:00 UTC. It closed under $0.95 for 16 hours and under $0.99 for 45. Then, 34 hours after the worst close, the 22:00 UTC hour on Sunday closed above $0.99 — the hour the Fed and the Treasury announced that every SVB deposit would be paid. The daily close, −334 bp on the Saturday, was back within 10 bp in 2 days. A break caused by a bank ends when the bank is fixed.

And one that wasn't a break: 10 November 2022, the day after FTX stopped withdrawals. Tether printed $0.971 on Coinbase at 12:00 UTC, closed the hour at $0.985, and was back above $0.99 the next hour. On Bitfinex it never traded below $0.9995. Two hours of a discount on one venue is what a scare looks like when the redemption window is open.

Finding 4: a break is a rotation

Money leaving a stablecoin in a hurry doesn't leave crypto. It goes to the next stablecoin, and the loser's discount shows up as the winner's premium in the same hour.

On 11 March 2023, while USDC traded at $0.874, Tether hit $1.027 on Coinbase at 02:00 UTC and closed 17 hours above $1.01; its best hourly close was $1.015. The premium lasted: on the daily series Tether's +78 bp took 15 days to come back within 10 bp, a week longer than USDC's discount took. The other coins with bank reserves went with USDC — USDP to $0.94 against Tether, BUSD to $0.987, DAI, which is mostly backed by USDC, to $0.85 on Kraken.

Ten months earlier it ran the other way. On 12 May 2022, in the hour Tether traded at $0.92 on Kraken, USDC closed at 1.05 USDT on Binance and BUSD at 1.04 — a 4-5% premium to Tether, which is the same number as Tether's 4-5% discount to a dollar seen from the other side. The rotation is the tell. A stablecoin trading at a discount while its rivals trade at par is a run on that coin; all of them trading at a discount together is a run on the venue's dollar, which is a different problem.

Finding 5: the second tier trades at a discount all the time

Against Tether, USDC's median is −1 bp and it has closed within ±25 bp on 92% of days. The rest drift. TrueUSD's median is −6 bp, one day in five closes outside ±25 bp, and it has 94 days beyond 1% — including a −402 bp close on 28 February 2024, when its reserves attestation slipped. First Digital's FDUSD sits at −10 bp on a typical day and closed −140 bp on 2 April 2025, the day a rival's founder accused its issuer of insolvency. Paxos's USDP went to −159 bp in the SVB weekend. And TerraUSD, 141 days on Binance, closed its last one at 0.25 USDT.

The pattern is redemption. The two coins whose window works — anyone with a verified account can hand Circle USDC and get dollars the same day; Tether redeems at $100,000 minimum for a 0.1% fee — hold the peg because the arbitrage that holds it is cheap. A coin whose window is slow, small, or in doubt trades at the price of getting out through the market instead, and that price is a standing discount. USD1, listed 22 May 2025, has so far closed within ±25 bp every day; 486 days is not yet a record.

How to read it yourself

• Know the normal band before you call anything a depeg. Ten basis points either side of a dollar is a normal day for Tether and a wide one for USDC; 25 bp is unusual; 1% is a break, and there have been three in nine years.
• Read the sign as a crowd, not a verdict. A few basis points over a dollar means people are buying crypto faster than the coin is being minted; a few under means they're leaving. 2026's −5.9 bp median is a market with more sellers than buyers, not a coin in trouble.
• Check the rivals. A discount on one coin with the others at par is a run on that coin. All of them at a discount is the venue's dollar, or the venue.
• Name the venue. The same hour on 12 May 2022 printed $0.9719, $0.972 and $0.9980 on three exchanges. Since 4 May 2021 Coinbase and Bitfinex have disagreed on Tether by a median of 6.5 bp a day; on the days that matter they disagree by percent.
• Ask what closes the window. Tether's 2018 discount lasted weeks because the doubt was about the reserves and no announcement could settle it. USDC's 2023 discount ended in the hour a government statement did. Read a break by asking what would have to happen for the arbitrage to restart.
• An exchange price is not a redemption price. Through every episode here except Terra's, the issuer paid a dollar to anyone who could reach its window. The discount is the price of not being able to.

Method, and what this cannot tell you

Weekly USDT/USD, USDC/USD and DAI/USD candles from Kraken's public API, from each pair's first week (23 March 2017 for Tether, 2 January 2020 for USDC, 19 September 2019 for DAI) to the week of 17 September 2026; the year tables use weekly closes, in basis points from one dollar. Daily USDT-USD closes from Coinbase Exchange's public candles from 4 May 2021, the day the market opened, to 20 September 2026, and USDC's dollar price as Binance's USDC/USDT daily close multiplied by that. The bitcoin buckets take each day's Tether deviation and bitcoin's Binance close 30 days earlier, sort the days into fifths by that prior return, and report each fifth's median deviation and share of days above par. Recovery episodes start on a daily close at least 25 bp from par and end on the first close back within 10 bp. The event windows are hourly candles: for Kraken, rebuilt from its public trade tape (about 45,000 trades for October 2018, 300,000 each for May 2022 and March 2023); for Coinbase, Bitfinex and Binance, the venues' own hourly candles. A break is timed from the worst hourly close; 'back above $0.99' is the first later hourly close at or above it, and the sustained figure requires the next 24 closes to hold.

• A peg is a price on a venue. Kraken, Coinbase and Bitfinex each printed a different low for Tether on 12 May 2022, and the differences are part of the finding, not noise to average away. The year tables are Kraken's; the daily tables are Coinbase's; each is named where it is used.
• Weekly and daily closes hide the intraday. Tether has never closed a day on Coinbase more than 1% from par, and it traded at $0.941 there for an hour. The event tables are hourly for that reason, and even an hourly close smooths over a minute.
• Kraken's weekly high and low columns are not used. The API returns single thin-book prints (a high of $1,000 in May 2019, $4 in September 2019, a USDC low of $0.86 in April 2021 on a week that closed at $0.9999) that no size traded at, so every extreme quoted here is an hourly close or a low from a rebuilt hourly candle with volume behind it.
• USDC's dollar price before 2023 is derived. Binance quotes USDC in Tether, so its dollar price is that times Coinbase's USDT-USD close, which is exact only when both closed in the same UTC day and assumes nothing about USDC itself. Binance delisted USDC pairs from 27 September 2022 to 10 March 2023; the SVB weekend is read from Kraken's own USDC/USD tape, not from Binance.
• Bitfinex's USDT/USD is not a dollar price in 2019. Bitfinex's own dollar balances were impaired that year (Crypto Capital, the April 2019 New York attorney-general action), so Tether traded at a premium of up to 5% THERE while it traded at a discount on Kraken. The series is used only for the 12 May 2022 and 12 March 2020 windows, and the 2019 episode is named as what it was.
• The second-tier league table is in Tether, not dollars. Every coin on it is quoted against USDT on Binance, so a −6 bp median means 6 bp below Tether, whatever Tether was worth that day.
• Nothing here is a redemption price. An exchange price is what a seller could get from a buyer that hour; the issuer's window, for those who can use it, paid a dollar throughout every episode except Terra's.