Cardano’s ADA price has fallen to its lowest value in a year after slight declines in decentralized finance activity on the blockchain network.

As per data from CryptoSlate, ADA is currently trading at $0.245, marking a 1.06% decline on the year-to-date metric. Interestingly, this price point represents the lowest value ADA has reached since the beginning of the year, effectively nullifying all the gains it had accrued throughout the year.

Why is ADA price struggling?

When the crypto market was experiencing a steady upward trajectory early in the year, ADA’s value greatly benefited from this run, peaking at around $0.45 in mid-April. However, since that peak, the cryptocurrency has been on a downward trend, with only a minor uptick noted in July.

Tether, the issuer of the world’s largest stablecoin, USDT, is breaking all records in 2023. In its Q1 assurance report, Tether gained an all-time high reserve surplus of $2.44 billion, and a net profit of $1.48 billion

This raised many eyebrows because the world’s largest asset manager, BlackRock, had only $1.2 billion net income in the same period.

Not only does dollar tokenization pay off but it pays off drastically. This is evidenced by profit efficiency per employee, as BlackRock’s profits are secured by 16,500 – 19,800 personnel vs. Tether’s modest 60 – 155 employee count.

Tether’s latest Q2 assurance report from its accounting firm BDO tells the same story. Its stablecoin reserves increased by $850 million, reaching $3.3 billion. Taken at face value, these reports show that Tether cracked the money-making formula while providing critical USDT stability in extreme market conditions.

How? Tether seemingly discovered a money printer in US treasuries. But is there a risk in Tether’s evolving business model? One that could topple the entire crypto market given Tether’s enormous $83.7 billion market cap weight?

Let’s explore.

Tether: Combining Saylor’s Strategy While Leveraging US Debt

Both Q1 and Q2 reports show Tether’s increased reliance on US treasuries. The latest Q2 attestation accounted for Tether Holdings Limited owning at least $86.5 billion in consolidated assets.

Out of that, $83.2 billion is in liabilities, revolving around Tether’s core product – USDT – stablecoin issuance pegged to the USD and backed by cash and cash equivalents. USDT is mostly backed by US government debt, as 64.5% of Tether’s total assets are in US Treasury Bills, at $55.8 billion.

The exchange-traded digital asset market has seen considerable outflows this week, marking a total of $107 million, illustrating an accelerated pace of ongoing profit-taking over the past weeks.

CoinShares’ Digital Asset Fund Flows Weekly report stated that Bitcoin took center stage with outflows amounting to $111 million, recording the most significant weekly outflows since March this year.

Crypto trading on centralized exchanges declined by 12% to $2.36 trillion. This is the lowest volume recorded since the beginning of the year, indicating a significant downturn in trading activity, according to CCData.

A breakdown of these trading activities showed that spot trading volume fell 10.5% to $515 billion —the second-lowest since March 2019. On the other hand, derivatives volume fell 12.7% to $1.85 trillion, which is the second-lowest volume since December 2020.

The crypto research firm attributed the diminished volume to the lack of price action volatility in significant crypto assets, including Bitcoin (BTC) and Ethereum (ETH), which traditionally drive trading volumes. CryptoSlate Insight reported that BTC’s price movement in July was “closely confined” as the flagship digital asset had “virtually no change in its price” on some days.

During a relatively stable second quarter, Bitcoin and Ethereum have expanded their shares to over 70% of the total cryptocurrency market capitalization for the first time since April 2021