Stablecoin Bad News Continues? 7.5 Billion in Tether Redeemed?

Stable coin Bust?

The fear, uncertainty and doubt about stablecoins continues, as investors have been redeeming USDT or Tether, the US Dollar backed stablecoin in record numbers according to this CoinTelegraph article.

source

The Story

It would appear that in light of the failure of UST: the algorhythmic stablecoin in the Terra Luna ecosystem and blockchain, that investors are afraid and are moving their capitol from Stablecoins to banks.
7.5 Billion is the number of Tether redeemed according to technical analyst John Roque of 22V Research source
This number was also cited by numerourous other sources:
source: https://www.protocol.com/bulletins/tether-stablecoin-crypto-crash
source: https://www.theguardian.com/technology/2022/may/16/stablecoin-tether-redeemed-crypto-crisis-terra
source: https://www.cnbc.com/2022/05/17/tether-usdt-redemptions-fuel-fears-about-stablecoins-backing.html

The irony here is multi-fold:

Safety

USDT or Teher is the oldest stablecoin and is 100% backed by cash and securities.
This ironically makes it one of the most safe of the stablecoins.
Tether has had it's detractors in the past who doubted whether it was really backed one to one by dollars, but as the stablecoin niche has come under increased government scrutiny it has made efforts to dispel such rumors.
Tether is evolving according to reports into a centralized project which is following much of the same regulations as US Banks.

Cost

Additionally this flight from Tether is not Free!
There are significant fees to transfer USDT
… and a 1% redemption charge on top of transaction or transfer fees.

Time

Plus once you redeem your USDT for dollars and the dollars arrives back in your bank account, there will be bank holds on the cash. - Then when you want to invest in crypto again, and transfer your dollars back to the crypto exchange you will have to wait, as most cryptocurrency exchanges require a 3-4 day waiting period, at least in my country, prior to you being able to trade.
Gemini Exchange being one of the exceptions that allows you to buy, but not transfer cryptocurrency, the first day you transfer cash into your account.

Name confusion

I also wonder if people are redeeming their USDT due to the name similarities between it and UST?

USDT AND USDC are the two largest Stablecoins right now.

I haven’t seen any articles on USDC being redeemed
And I see no negative articles on Ethereums Dai stablecoin.

Diversification

I am personally hoping investors will diversify their stablecoin holdings, and in their search discover HBD. A four year old stablecoin, currently paying an outstanding 20% APR on HBD staked in your wallet, and it’s possible to get higher yields if you stake it on PolyCub, a DeFi project on Polygon, where it’s earning 33% APR currently. This would be one positive thing for investors and cryptocurrency to result from the tragic Luna Disaster.