Stablecoin Tether has been under pressure as it falls from its $1 peg, leaving investors skittish about its stability as its rival stablecoin terraUSD faces difficulty. As a result, investors withdrew $7 billion from tether, which is now raising questions about the reserves backing the asset. Jay Hatfield, CIO at Infrastructure Capital Management, joins Closing Bell to discuss. 

Closing Bell

Investors Pull $7 Billion From Tether Stablecoin As It Falls From $1 Peg

now, while the broader crypto market is recovering, investors are still skittish and they're pulling money out of one particular asset, They have drawn more than $7 billion dollars from tether since it briefly dropped below its dollar peg in recent days, leading to questions about the reserves behind the stable coin. Well, it's value is supposed to stand at a dollar, but tethers price slipping late last week to as low as 95 cents as investors panicked over the collapse of rival coin terra USG. So what does this mean for stable coins in the crypto industry as proponents work to build trust in fiat backed digital assets, joining me now is jay Hatfield, see IO at Infrastructure Capital Management, a boutique investing firm. A. J. Thanks so much for coming on the show, how big of a deal is it that investors are pulling out of tether. Thanks kristen for having me on the show. We think that that was a catalyst that Teller collapsed as a catalyst. Um that could take us lower on on Cryptocurrency and particularly focusing on Bitcoin. And we're really focused on two key facts that makes us fear a further collapse. The first is that Article one of the constitution bars any company from creating their own currency. Um, so that could lead to incremental regulation, which certainly the collapse of tether is Made almost 100%. And then the second thing is just simply the liquidity bubble that the Fed created. If you really look at it, sure took their current or Bitcoin took off from about 10,000 level prior to the intervention of the Fed Went up to 70,000 and happened to peek almost the same day that the Fed capitulated on transitory, which meant that we were going to have liquidity reduction. Um, so it could be that that Bitcoin does a full round trip just like art did our coin from 40 to 1 70 to 40. So it's not impossible. It goes to 10,000 as the Fed starts draining liquidity, which starts June one. All right, jay Hatfield, chief investment officer at Infrastructure Capital Management. We've got to leave it. There were tight on time, but I hope you'll come back.