Since when are links to random forum posts allowed for this type of stuff?
Best source IMO for this is https://coinmarketcap.com/currencies/tether/
Tether starting to lose its peg too, after Terra did
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Re: Tether starting to lose its peg too, after Terra did
#42If Tether is backed, then Bitfinex could buy currently-discounted tethers off the market and redeem them for face value, pocketing the difference. The fact this is not happening means they really don't have the money, do they?
In the short term, they have the reserves for sure. In the short term, this is more of a classic bank-run. The Terra-coin + Luna scared a lot of cryptocoin holders, and now they're running away from another stablecoin. Even if Bitfinex had the money, the amount of traders leaving USDT has to be a colossal amount. The amount of money Bitfinex can transfer at any given time is limited, so the peg will bend and buckle.…
> In the short term, they have the reserves for sure.
Why for sure?
Their "audits" and other information provided that they have the reserves were rather unsubstantial, if not outright dodgy.
Re: Tether starting to lose its peg too, after Terra did
#43[deleted]
Re: Tether starting to lose its peg too, after Terra did
#44Load ze tether fud. I'm no fan of USDT, and don't hold it but the same thing happened in the May 2021 crash. I think it's just the high volume of people selling right now cause it to depeg.
I think if it goes too far below you will see the major exchanges go into "maintenance mode" since they're all deeply invested into keeping it alive.
Re: Tether starting to lose its peg too, after Terra did
#45If Tether is backed, then Bitfinex could buy currently-discounted tethers off the market and redeem them for face value, pocketing the difference. The fact this is not happening means they really don't have the money, do they?
In the short term, they have the reserves for sure. In the short term, this is more of a classic bank-run. The Terra-coin + Luna scared a lot of cryptocoin holders, and now they're running away from another stablecoin. Even if Bitfinex had the money, the amount of traders leaving USDT has to be a colossal amount. The amount of money Bitfinex can transfer at any given time is limited, so the peg will bend and buckle.…
> UST / Luna had substantial reserves.
Did they, or did they just claim to while minting stablecoin in order to pump the price of Bitcoin? Which these guys (Tether) would want to do because the owners of Tether are a massive exchange, and they depend on Bitcoin being high to attract customers to the market, and the first thing news customers so is bring the real objective with them: actual cash.
Re: Tether starting to lose its peg too, after Terra did
#46You know that shit has hit the fan when Reddit puts up the suicide prevention hotline in the sidebar.
Re: Tether starting to lose its peg too, after Terra did
#47Going to be a hell of a ride down. Wouldn’t surprise Me to wake up to sub $20k BTC
If Tether massively breaks the peg, there is a non-trivial chance of sub $2k BTC tomorrow
To me that math doesn't add up very well.
Let's assume that 5 minutes from now, Tether drops to zero. Turns out Tethers were approximately 100% unbacked.
There are currently ~$80B USDT in circulation. Even if you also assume 100% of USDT holders were also Bitcoin maxis who were using USDT as a "stable store of value" when they periodically want to exit their BTC position, the market cap of Bitcoin is still ~$500B, so the $80B -> 0 drop is still only 16% of BTC's market cap (and obviously USDT is not only being used to exit BTC positions but also ETH and every other crypto besides).
Re: Tether starting to lose its peg too, after Terra did
#48Earlier quoted context omitted.
There is a correlation between BTC and GPU / graphics card price. And there's the stupid quantities of energy devoted to mining. At some point, processing bitcoin will become uneconomic. It will then be unspendable, and the price will then drop to zero.
If blocks aren’t being mined fast enough, the difficulty level automatically goes down, resulting in a higher reward for the same hash rate. So in theory, processing bitcoin should never become uneconomic.
This. It can never be economically zero as it has been "bootstrapped" once, in 2009. Someone will always have incentive to mint cheap.
Re: Tether starting to lose its peg too, after Terra did
#49Earlier quoted context omitted.
There is a correlation between BTC and GPU / graphics card price. And there's the stupid quantities of energy devoted to mining. At some point, processing bitcoin will become uneconomic. It will then be unspendable, and the price will then drop to zero.
If blocks aren’t being mined fast enough, the difficulty level automatically goes down, resulting in a higher reward for the same hash rate. So in theory, processing bitcoin should never become uneconomic.
Yes, the problem is it only does that around every two weeks - and that’s at a normal block rate.
If hash rate were to suddenly drop say 90% then it could take months to adjust
Re: Tether starting to lose its peg too, after Terra did
#50Earlier quoted context omitted.
If Tether massively breaks the peg, there is a non-trivial chance of sub $2k BTC tomorrow
Would BTC be worth buying at sub-$2k? I never saw the use-case for it. I’d sooner use a faster, cheaper, more energy-efficient, more centralized crypto like XLM or XRP. But even then: for payments it’s hard to compete with Visa/Mastercard for speed and safety. And as a store of value all crypto is crazy volatile. If BTC goes sub $2k, would anybody reasonably want it anymore or would the emperor have no clothes?
I'd definitely put a significant amount of money to buy it at $2K, and almost literally everybody I know would too.