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Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

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Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#91

Post by lbotos »

Is this right:

The problem with tether is a lot of crypto use it as sort of an "on-chain peg" and some people trade "real value crypto" (bitcoin) for tether. It's not a problem until the actual tether holders can't cash out to fiat.

The secondary effect is that tether may be pumping the price of all crypto everywhere because it's so ubiquitous.

Do I have this right? I'm mostly stuck on the "value" of tether beyond some sort of "accounting" or "tax avoidance" (no judgement here, trying to figure out why ppl would have tether's instead of "actual crypto".

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#92

Post by rvz »

rglullis wrote: post #72
aaronax wrote: post #52

Earlier quoted context omitted.

Anyone holding Tether will be stuck selling it for the equivalent of $0.05 or whatever. This alone would have no effect on crypto prices. However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.

Don't forget the amount of exchanges that can not trade USD so they rely on USDT to deal with BTC. Tether crashing is going to destroy the value of BTC and it will take all of the alts with it. It will make Mt Gox look like a hiccup. Still, it needs to happen. Keeping Tether alive is the worst thing that can happen to crypto.

> Still, it needs to happen. Keeping Tether alive is the worst thing that can happen to crypto.

Exactly. The next big crypto crash is waiting to happen. Will probably come from the debt ceiling crisis with the US then cracking down on Tether afterwards with the US government also collecting unrealised capital gains taxes; enough to scare the hands out of lots of investors.

Tether knows they are a scam. So they are getting out while they can.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#93

Post by gadnuk »

josefrichter wrote: post #69
aaronax wrote: post #52

Earlier quoted context omitted.

Anyone holding Tether will be stuck selling it for the equivalent of $0.05 or whatever. This alone would have no effect on crypto prices. However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.

That for sure. But I am more wondering about the collateral damage to other coins. Coz it would likely trigger sell off of many other coins to cover loses. On the other hand, the market cap is 75B, while ETH is 488B and BTC is 919B. So the impact maybe wouldn't be too drastic and too long lasting. I wonder if it's worth converting USDC and DAI loans to USDT, would be easier to repay if it did crash..

Market Cap != Liquidity

70% of the crypto volume is in USDT.

From 2020 (should still hold): https://coingape.com/tether-dominates-exchange-trading-with-...

If Tether collapses, so does USDT. If exchanges have majority of their volume in USDT pairs, then the market liquidity dries up and the whole thing collapse. Remember that those coins need to be cashed out for actual USD. But if that USD does not actually exist, what will you sell into?

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#94

Post by chpatrick »

pezzana wrote: post #65

And? So what? If that quantity of Tether (1/75 of the float) were dumped into the open market for USD, you'd expect to see the USD change rate fall. That clearly hasn't happened. The rate has been very close to 1:1 forever. There's this unsubstantiated conspiracy theory that as I gather goes like this: Tether prints tokens, uses them to buy bitcoin when the USDBTC exchange rate falls. These Tether issuance spikes alw…

> If that quantity of Tether (1/75 of the float) were dumped into the open market for USD, you'd expect to see the USD change rate fall.

Not if the small amount of people who want to redeem their Tethers for USD or vice versa are able to. Everyone else will happily trade at that rate as long as they feel confident what they own is equivalent to a dollar. The problem is if everyone suddenly wants their money back and it turns out it doesn't exist.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#95

Post by arez »

repomies69 wrote: post #87
teh_infallible wrote: post #78

Earlier quoted context omitted.

It certainly is strange that Tether hasn’t been shut down for counterfeiting, which is essentially what they are doing. I assume people in the banking industry allow them to operate as a way to hold leverage over the crypto markets and absorb capital that would otherwise flow to altcoins.

There are some other stablecoins, like USDC (about half the size of Tether. Why would Tether need to be closed down while USC not? Or do you think all of them should be shut down? Tether is just an IOU note. I don't have problems with IOU notes, unless someone forces me to use them. Personally I haven't used tether and probably never will, however I don't have any problem if someone else wants to use it.

you don't understand the problem of printing IOUs and buying btc with it. You don't have to care, but you will if everything goes to zero

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#96

Post by javert »

beaconstudios wrote: post #85
javert wrote: post #54

Earlier quoted context omitted.

Bitcoin is principled. Crypto is not principled.

Bitcoin is also not principled. Plenty of people are just speculating and trying to not be the bagholder.

You can't keep traders from trading bitcoin. That doesn't mean bitcoin is unprincipled. It's in the whitepaper and the design of bitcoin. For example, the 21M btc supply limit. Bitcoin's design reflects a certain ideology about money.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#97

Post by cmckn »

I understand why stablecoins exist, but doesn’t an operation like Tether go against the decentralization goal of “crypto”? The fact that the ecosystem has become dependent on these types of players is interesting to me. Why hasn’t the community demanded even basic transparency about their operations? It seems to be totally exempt from the pious expectations of other crypto projects.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#99

Post by fennecfoxen »

peakaboo wrote: post #15
alpha_squared wrote: post #11

Every time there's a tether story here, the inevitable discussion of fraudulent activity comes up because Tether seems like an outright scam. I'm inclined to believe all that from what I've read and however little I can make sense of. However, I can't really tell how this ends. They seem confident that there will be no repercussions to minting money out of thin air and, so far, they've been right. Eventually, that's…

This also means that nobody needs to be poor. Anyone can just get some money since its tied to nothing.

"Poverty" is not about how much money you have, income or wealth. The only reason money matters to poverty or to human well-being is when that money can buy something meaningful. If we find we are able to forget this, it stands as a testament to the remarkable stability of modern fiat currency.

Marking arbitrary large numbers in digital ledgers, blockchain or otherwise, does not cause prosperity. When everyone has infinite money, no one has any money at all, they just have their things.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#100

Post by Osiris »

lbotos wrote: post #91

Is this right: The problem with tether is a lot of crypto use it as sort of an "on-chain peg" and some people trade "real value crypto" (bitcoin) for tether. It's not a problem until the actual tether holders can't cash out to fiat. The secondary effect is that tether may be pumping the price of all crypto everywhere because it's so ubiquitous. Do I have this right? I'm mostly stuck on the "value" of tether beyond so…

If one is using something like Uniswap to exchange crypto, you cannot go directly to Fiat, so people that want to sell a token or Ethereum will trade the asset for USDT and then later trade the USDT for another asset when the price has dropped.

It's just a way to buy and sell crypto with an intermediate asset that has almost no price volatility.

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