I don't know the details. Multiple places seem to imply there is at least some planned mechanism, that's all I was referring to. E.g. from the white paper: "Tethers may be redeemable/exchangeable for the underlying fiat currency pursuant to Tether Limited’s terms of service". I don't have a position here and no axe to grind, but parting from your auditors is in many cases a significant red flag.
They have Web pages for buying tethers/selling them, but they're always closed and just say contact them if you're a $x million investor. So the claim is presumably that the billions of tethers printed are all backed by institutional investors. I just had a look at the site now and the registration system is apparently being rebuilt, so there's no path to buy/sell through them today.
Nouriel Roubini: "Like any not credible fixed exchange rate regime that is not backed by enough reserves, Tether/USDT collapses when they run out of true dollar reserves. And since Tether/USDT 1:1 peg to the US$ is the mother of all scams it will soon collapse taking Bitcoin down with it." https://twitter.com/Nouriel/status/957623357708668928
If traders lose confidence in Tether, won't they sell Tether to buy other cryptocurrencies, thereby driving the price of Tether down and the price of other cryptocurrencies up?
Initially yes, but I think we would also see a flight from cryptos in general shortly afterwards because of the risks posed to the whole space by a collapsing/fraudulent Tether.
How did this thread get to be 46 comments long without a single mention of or link to @Bitfinexed?! @Bitfinexed is the anonymous Twitter account that has been publicly sounding the alarm about Tether for almost a year now. They got the receipts, they bring the fire: https://twitter.com/bitfinexed And longer articles at: https://medium.com/@bitfinexed/ And as payment for his/her troubles as the Harry Markopolos of the…
I've been following this account closely, and while some things are a bit ludicrous (attributing the bullrun to USDT only without mentioning the hardfork, for one) the majority of their points are spot on. I know I have my exit strategy in place.
Nouriel Roubini: "Like any not credible fixed exchange rate regime that is not backed by enough reserves, Tether/USDT collapses when they run out of true dollar reserves. And since Tether/USDT 1:1 peg to the US$ is the mother of all scams it will soon collapse taking Bitcoin down with it." https://twitter.com/Nouriel/status/957623357708668928
If traders lose confidence in Tether, won't they sell Tether to buy other cryptocurrencies, thereby driving the price of Tether down and the price of other cryptocurrencies up?
That's what I'm expecting to see. An initial run up in crypto value, followed by exchanges collapsing because they relied on USDT in place of fiat.
Or Tether Untethers, if you dislike the passive voice.
Different meanings ... "Something untethered Tether" vs "Tether untethered something."
The obvious "something" in the second example being reflexive: "Tether untethers itself". Which is perfectly fine, if indirect, usage. We often use product names to refer to both the product and the producer. When we say things like, "I wish Windows implemented a Unix subsystem", we actually mean, "I wish the producers of Windows implemented a Unix subsystem."
Nouriel Roubini: "Like any not credible fixed exchange rate regime that is not backed by enough reserves, Tether/USDT collapses when they run out of true dollar reserves. And since Tether/USDT 1:1 peg to the US$ is the mother of all scams it will soon collapse taking Bitcoin down with it." https://twitter.com/Nouriel/status/957623357708668928
If traders lose confidence in Tether, won't they sell Tether to buy other cryptocurrencies, thereby driving the price of Tether down and the price of other cryptocurrencies up?
Only if anyone's willing to take Tether at a non-zero price.
Also a skeptic: this author doesn't know what they're talking about. "Turning on the printing presses" to defend the USDT/USD price? What? No, the opposite: Tether would have to be buying USDT with USD then destroying it. There remains the possibility that Tether doesn't need to have the money in reserve (or not 100%, anyway). It can just conduct open-market operations to maintain parity: printing & selling Tether wh…
I think the idea is that when Tether turns up the printing press, they are using it to buy Bitcoin, which they can then use to buy USD, which can then be used to buy back some of the USDT on Kraken. The assumption is that there isn't enough USD cash in reserve to actually buy back the Tethers on Kraken (and anywhere else it may be flagging). Since they have no banks (as far as anyone can tell), and it's very difficul…
They should already own a ton of bitcoin and someone speculated in a previous thread that their reserves are actually in bitcoin, which would make a lot of sense. The problem here is that every time someone redeems their tether for real dollars, Tether (the company) have to sell part of their reserves and this brings bitcoin price down, in effect dwindling their reserve pool. If there are enough bitcoin buyers or there aren't many people redeeming their tethers for dollars, they should be fine. However, if people lose faith in tether (the coin) then mass redemption will crash bitcoin prices (judging by the daily volumes of tether trading) and there won't be enough reserves to cover everyone at par with the dollar. Hence the pyramid scheme allegations. This is all assuming they don't hold $2+ bn cash in reserves.
I think the idea is that when Tether turns up the printing press, they are using it to buy Bitcoin, which they can then use to buy USD, which can then be used to buy back some of the USDT on Kraken. The assumption is that there isn't enough USD cash in reserve to actually buy back the Tethers on Kraken (and anywhere else it may be flagging). Since they have no banks (as far as anyone can tell), and it's very difficul…
They should already own a ton of bitcoin and someone speculated in a previous thread that their reserves are actually in bitcoin, which would make a lot of sense. The problem here is that every time someone redeems their tether for real dollars, Tether (the company) have to sell part of their reserves and this brings bitcoin price down, in effect dwindling their reserve pool. If there are enough bitcoin buyers or the…
very plausible vector for contagion! do u remember what thread that was your are referencing?
They should already own a ton of bitcoin and someone speculated in a previous thread that their reserves are actually in bitcoin, which would make a lot of sense. The problem here is that every time someone redeems their tether for real dollars, Tether (the company) have to sell part of their reserves and this brings bitcoin price down, in effect dwindling their reserve pool. If there are enough bitcoin buyers or the…
very plausible vector for contagion! do u remember what thread that was your are referencing?
I can't recall the hn thread (there have been tons of crypto currency threads recently), but the comment was referencing this reddit discussion where a bitfinex representative made the same conjecture:
> Isn't it more plausible that this is not someone writing a check for tethers (money coming in from outside the crypto ecosystem) but more likely it is coming from converting other cryptos into USDT?...
I think you'd like this overview of England's South Sea Company and how John Blunt used all kinds of now illegal monetary fraud to become England's largest company, worth more than their GDP: https://www.youtube.com/watch?v=k1kndKWJKB8
> become England's largest company, worth more than their GDP: In case people don't realize, GDP is the total amount a country produces per year , not the total value of the country. There's nothing impossible about a country's largest company being worth more than it's GDP.
There's still a long way to go to do that: With that market cap, Apple is worth nearly 1% of the world’s GDP according to the latest estimates from the World Bank that peg the world’s output at $74.2 trillion. That also means the company is valued at close to 4.4% of America’s $18 trillion GDP.
https://www.investopedia.com/news/apple-now-bigger-these-5-t...