Watch the sell orders rack up in real time: https://ftx.com/trade/USDT/USD
That's a great link! The numbers are absolutely mind boggling to me. I just still can't believe how much money is involved in this completely unregulated market.
Tether starting to lose its peg too, after Terra did
51–60 of 976 posts
Re: Tether starting to lose its peg too, after Terra did
#52Re: Tether starting to lose its peg too, after Terra did
#53If 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?
"Elsewhere on the website, there’s a letter from an accounting firm stating that Tether has the reserves to back its coins, along with a pie chart showing that about $30 billion of its dollar holdings are invested in commercial paper—short-term loans to corporations. That would make Tether the seventh-largest holder of such debt, right up there with Charles Schwab and Vanguard Group."
Commercial paper is not dollars, so tether effectively admits it is not backed. The risk of default on commercial paper is huge compared to dollars held in reputable banks' accounts.
Re: Tether starting to lose its peg too, after Terra did
#54Earlier quoted context omitted.
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.
UST is Terra-coin, which collapsed 3 days ago.
USDT, Tether, is a completely different coin. the one we're discussing today.
---------
UST + Luna had substantial reserves. They proved it with their actions this past week. They weren't *enough* reserves mind you, but they were posting their BTC-wallets on Twitter and showing the movements.
Re: Tether starting to lose its peg too, after Terra did
#55The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…
> If you've been honestly working on the assumption that it is, then you deserve to lose your (real) money to some crypto VCs on an island somewhere.
The sad reality is that many poorer and financially illeterate people have been tricked by VCs and other grifters into this with billions of dollars spent in advertising. So, no, they don't deserve to lose their money to these assholes. These assholes need to be prosecuted, fined and put to jail if necessary.
Re: Tether starting to lose its peg too, after Terra did
#56Watch the sell orders rack up in real time: https://ftx.com/trade/USDT/USD
In times like this I miss the trollbox.
Re: Tether starting to lose its peg too, after Terra did
#57Coffeezilla has been doing good work uncovering the mess that is Tether: https://www.youtube.com/watch?v=-whuXHSL1Pg&t=0s.
Re: Tether starting to lose its peg too, after Terra did
#58You can keep track of all of the various "stable"coins here: https://coinmarketcap.com/view/stablecoin/
Re: Tether starting to lose its peg too, after Terra did
#59Earlier quoted context omitted.
They are actually redeeming them on their website for anyone that wants to. > @paoloardoino GM Reminder that tether is honouring USDt redemptions at 1$ via http://tether.to . >300M redeemed in last 24h without a sweat drop. 12:38 AM · May 12, 2022·
You need to show up with $100k to do the redemption. Granted if you did the round trip with only $10k you’re looking at peanuts in arbitrage but it _is_ a way for them to prevent real arbitrage that feeds into itself. I bet the fact that people wanting to short don’t believe they have the funds doesn’t help. But hey if you are a millionaire short tether might be worth setting up the recurring trade out!
So wait, assuming I had a hundred k, and they were willing and able to pay out, I could buy 97k of tether and redeem it for 100k?
Just an instant 3% return? This seems like there's no way they are opening themselves up to arbitrage like this.
Re: Tether starting to lose its peg too, after Terra did
#60Earlier quoted context omitted.
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.
Short term, USDT kept enough reserves to hold the peg steady for years.
I'm not saying USDT was 100% backed. They probably could have accomplished all of this with just 20% backing, maybe even less. But in the short term, only 20% of people would ever "test" the reserves so to speak.
Now I don't know how much USDT was fraudulent... I do believe a lot of it was fraud. But there's clearly a nugget of truth, a nugget of backing that kept the price steady last year and the year before.
Once that "nugget" of stability runs out, its all over.