Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tether (USDT) price falling to $0.95

coinmarketcap.com

Post reply on HN
Print view View original

71–80 of 95 posts

Re: Tether (USDT) price falling to $0.95

#71

Post by JumpCrisscross »

jungturk wrote: post #63
teilo wrote: post #58

Earlier quoted context omitted.

No, it’s not. It means you don’t pay capital gains when you’re merely exchanging one form of crypto for another. You have not realized any gains until you have converted your crypto into real assets. Converting from one form of crypto to another for the purposes of arbitrage only delays the taxes. It never eliminates them. This is really no different than selling and buying stocks in an IRA account.

Crypto-crypto trades no longer enjoy the like-kind exchange tax treatment you're describing (in the US, as of 12/31/2017). The recent tax law narrowed that benefit to real estate only. https://www.coindesk.com/owe-irs-crypto-crypto-trades/

> no longer

On 31 December 2017, the IRS clarified that § 1031 does not apply to crypt-crypto trades. It did not say § 1031 applied to crypto-crypto trades before then.

The article you reference says "traders still may be able to argue that their transactions undertaken in 2017 and prior years were not taxable under the Section 1031 like-kind exchange rules," but that "the application of the like-kind exchange rules to crypto transactions is far from certain" [1, emphasis mine].

[1] https://www.coindesk.com/owe-irs-crypto-crypto-trades/

Re: Tether (USDT) price falling to $0.95

#72

Post by mrep »

TylerE wrote: post #37
zamadatix wrote: post #34

Earlier quoted context omitted.

$2,000,000,000+ worth issued without proof of backing? What value did Tether add that people were willing to deal with it as a middleman to dollars? Side note: The graph could use some TLC. The colors are indistinguishable and there are no static historical charts on the page, just the graph since my visit.

That is could be used to avoid all those annoying banking laws (AML, KYC, etc).

Until the bank they are using to accept USD decides to check them on that (per https://news.ycombinator.com/item?id=18214935):

@patio11 19h19 hours ago Eventually, a bank or, more likely, a regulator is going to say “Actually this doesn’t look like a legit deposit that we’re uncomfortable with supporting due to AML/regulatory reasons. It looks an awful lot like proceeds of crime intermingled with grey money.”

@patio11 19h19 hours ago More And the terrifying outcome, from the cryptocurrency economy perspective, is the regulator doing what the USFH did with respect to Mutum Sigillum (Mt Gox’s US front): “OK, we’re going to give you two choices.”

@patio11 19h19 hours ago More Door #1: Prove that it’s legal money. This should be trivial for you because KYC is the law and your compliance should be automatic. So have your lawyer suit up. BTW we expect this to take 3+ years.

Door #2: We propose a 50% haircut.

Re: Tether (USDT) price falling to $0.95

#73

Post by eberkund »

Except that Tether price often fluctuates and it has gone lower than $0.95 before, it is already on its way back up since this link was posted. As another commenter mentioned the coinmarketcap.com price is based on the average price of trades at various exchange, if there is a lot of sell pressure it will naturally temporarily fluctuate lower.

Don't get me wrong, I think Tether is up to something fishy but I don't think that they have billions of dollars less in assets than the number of Tether issued.

Re: Tether (USDT) price falling to $0.95

#75

Post by empath75 »

yholio wrote: post #70

There doesn't seem to be any particular new development, just a string of unsubstantiated rumors and hoaxes: https://blokt.com/news/too-much-fud-bitcoin-pumps-tether-dum... That's not to say that Tether does not have major credibility issues and dubious liquidity, just that no new publicly available information would justify the movement. On the other hand, when a bank run is in progress, it's irrelevant if it was st…

> That's not to say that Tether does not have major credibility issues and dubious liquidity, just that no new publicly available information would justify the movement.

When a jenga tower topples over, it's not usually because someone played especially badly, but because almost any touch at all would make it fall.

Re: Tether (USDT) price falling to $0.95

#76

Post by deckar01 »

JumpCrisscross wrote: post #42
deckar01 wrote: post #33

Earlier quoted context omitted.

It's not about backing with value, it's about liquidity. Traders want to use USD assets on a market and be able to transfer them as a digital asset between exchanges with minimal 3rd party fees. Transferring USD through a bank account can be expensive.

> Transferring USD through a bank account can be expensive I keep hearing this, yet can instantly and for no charge electronically transfer under $10,000 between various accounts, and with minimal (often waived) wire charges, much larger quantities more reliably (and with less risk) than using a "stable coin".

In my experience, wiring fiat USD from a non-US exchange to a a US bank account is slow (days) and has hidden fees (my bank, their bank, and someone in between).

Re: Tether (USDT) price falling to $0.95

#77

Post by tlrobinson »

apo wrote: post #28

It could have something to do with the arrival (soon to be a flood) of much-better financed and regulated stable coins such as the Gemini dollar: To date, there has been no trusted and regulated digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies. Enter the Gemini dollar — a stable value coin (often called a “stablecoin”) that is (i) issued by Gemini, a New York…

If USDT is fully backed by real USD that shouldn’t affect the price.

Re: Tether (USDT) price falling to $0.95

#78

Post by rtkwe »

freeone3000 wrote: post #64
rtkwe wrote: post #57

Earlier quoted context omitted.

Only have a cursory understanding of capital gains but shouldn't the exchange out of Tether back into $Crypto have zero gains if it's working as intended since there's no change in value of your holding?

Capital gains tax on securities (like tether) is assessed on the difference between what you paid for the security and what you sold the security for. You can denominate it in whatever you like (tether, bitcoin, gold, sheep, whatever), but it's assessed in USD at time of sale. Essentially, you're being taxed on the income you got from holding that security, not for trading, it's just assessed when you trade.

Yeah I'm aware of that much but toast0 said both transactions (which I took to mean for example BTC -> Tether and Tether -> BTC) would both be taxed which doesn't make sense where Tether is working as intended and holds value at $1. Of course the sale of BTC for Tether would be taxed because the market for that is moving but Tether in theory should not have an additional tax exposure just like selling BTC for USD then buying ETH doesn't require you to pay taxes on your ETH purchase with USD.

Re: Tether (USDT) price falling to $0.95

#79

Post by toast0 »

rtkwe wrote: post #78
freeone3000 wrote: post #64

Earlier quoted context omitted.

Capital gains tax on securities (like tether) is assessed on the difference between what you paid for the security and what you sold the security for. You can denominate it in whatever you like (tether, bitcoin, gold, sheep, whatever), but it's assessed in USD at time of sale. Essentially, you're being taxed on the income you got from holding that security, not for trading, it's just assessed when you trade.

Yeah I'm aware of that much but toast0 said both transactions (which I took to mean for example BTC -> Tether and Tether -> BTC) would both be taxed which doesn't make sense where Tether is working as intended and holds value at $1. Of course the sale of BTC for Tether would be taxed because the market for that is moving but Tether in theory should not have an additional tax exposure just like selling BTC for USD the…

Sorry, you're right, if tether is working as marketted, it is a taxable transaction, but taxes are due on $0 of gain, so....
Post reply on HN