81–90 of 211 posts
There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?
I often find the headlines, and even stories about, crypto to be inscrutable to those looking in from the outside. The stories also seem to come from an ecosystem of sites I don't recognize so it's hard to even judge if it's reputable site (or at least guess at the biases it might have). None of this is inherently bad, but there seems to be a growing divide between "mainstream" tech and the crypto world that is harde…
Earlier quoted context omitted.
My bank isn’t wash trading its reserves to drive a speculative bubble…
And neither should Tether. If any meatspace bank was found to be doing that they would be raked over the coals by the SEC but it doesn't make people trading in USD suddenly worthless.
Lebanon’s central bank was found to be engaging in funny business. Its currency crashed. Tether is akin to the central bank of USDT, not another player in the system.
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Source?
“This paper investigates whether Tether, a digital currency pegged to the U.S. dollar, influenced Bitcoin and other cryptocurrency prices during the 2017 boom. Using algorithms to analyze blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. The flow is attributable to one entity, clusters below round prices, induces asymmetric auto…
There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?
You can send it to any wallet. No KYC needed. You can do so programmatically thru a standardized RPC endpoint. You can send it to smart contracts (i.e. decentralized apps), to borrow against it, leverage it, lend it,... plenty if things to do once the USD makes it into a programmable blockchain. Still a scam imo.
That is a legal opinion not a technical one, and it's far from clear that the enforcement of KYC will be kept off coins forever.
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USDC has been audited and it's solid. I know of people in large banks who are working with USDC and they've vouched for it being 100% ok.
Not an audit, an attestation. They check assets at a moment and time.
https://ag.ny.gov/press-release/2021/attorney-general-james-...
> Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’
> On November 1, 2018, Tether publicized another self-proclaimed ‘verification’ of its cash reserve; this time at Deltec Bank & Trust Ltd. of the Bahamas. The announcement linked to a letter dated November 1, 2018, which stated that tethers were fully backed by cash, at one dollar for every one tether. However, the very next day, on November 2, 2018, Tether began to transfer funds out of its account, ultimately moving hundreds of millions of dollars from Tether’s bank accounts to Bitfinex’s accounts. And so, as of November 2, 2018 — one day after their latest ‘verification’ — tethers were again no longer backed one-to-one by U.S. dollars in a Tether bank account.
An actual audit looks at more than a bank balance snapshot.
There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?
Pretty straightforward: You can currently get 8.88% APY return on lending stablecoins on Celsius[0]. It's also much easier to borrow and use in incredibly risky contracts, yield farming, etc Stablecoins let you engage in much more risk than USD without the volatility of crypto prices. [0] https://celsius.network/earn-rewards-on-your-crypto
Banks doing C&I lending to modest risk (but still not "rated bond issuer") companies are charging mid-single-digit rates. Those banks are generally paying depositors way under 1%.
There do exist loan portfolios legitimately producing these kind of yields, but they are not trivial to produce. Actively managed and monitored specialized portfolios -- where you would really want to diligence the track record and underwriting/origination methodology of the lender.
Don't get me wrong: dislocations do happen and arbitrages do open up, sometimes for far longer than you might think. But fundamentally, if this is non-Ponzi finance, someone must be using those funds for a productive enterprise that yields enough to cover the cost of capital. What is that in stablecoin lending??
(Source: I am an investor and former operator in specialty lending company, having sourced/raised capital in > 100 debt and equity deals.)
I often find the headlines, and even stories about, crypto to be inscrutable to those looking in from the outside. The stories also seem to come from an ecosystem of sites I don't recognize so it's hard to even judge if it's reputable site (or at least guess at the biases it might have). None of this is inherently bad, but there seems to be a growing divide between "mainstream" tech and the crypto world that is harde…
Earlier quoted context omitted.
How is minting to a few companies proof of fraud?
Because we know that Alameda and Cumberland do not, on the whole, possess $63 trillion in USD. That's the official number of "outstanding Tether" posted on the Tether website [0]. If these allegations are true, the other holders of Tether total a couple million, meaning Alameda and Cumberland together must have trillions of holdings. Which, based on filings, we know isn't what they're reporting. [0] https://wallet.te…
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As an individual trader running an algorithmic arbitrage operation at > 40 exchanges, I have to. You can count me in for USDT 56k. I am small fish. My algorithms constantly watch USDT/USD price at 3 exchanges which are independent from Tether Inc, and if USDT drops below $0.95 at one of them, they stop issuing orders selling to USDT.
Are you saying that the exchanges are forcing a $1 +/- 0.05 price range for Tether instead of letting it float freely? Interesting.