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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

#341

Post by raverbashing »

davidweatherall wrote: post #189
adhesive_wombat wrote: post #30

The 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…

I don't understand how you bodge a stable coin startup. Surely you just mint the tokens in exchange for dollars, and then put ~50% of the dollars in zero risk investments (some form of treasury bonds), and then take the 0.5-1% interest per year as your revenue. Tether currently has $81b marketcap so you could be making $400-800m per year doing basically nothing?

> I don't understand how you bodge a stable coin startup.

You're assuming "bodging" wasn't part of the plan all along

Re: Tether starting to lose its peg too, after Terra did

#342

Post by rwmj »

pjc50 wrote: post #325
sdgdfgsfdfgsdfg wrote: post #230

Earlier quoted context omitted.

The high buy volume at $0.98 is due to arbitrage. This is to be expected before the final crash. People are using the opportunity to net an instant 2% return. Buy $10M USDT at $0.98, redeem at Tether for $1, take home $200K of profit instantly. Thing is, this will only last until Tether runs out of liquidity. Then all bets are off.

> redeem at Tether for $1 Is the redemption window really open? That's something people have been extremely skeptical of.

Apparently you have to bring a minimum of $100K of USDT to get it redeemed into real money.

I would say this is an incredibly stupid trade to try because you're relying on Tether actually paying out as promised.

Re: Tether starting to lose its peg too, after Terra did

#343

Post by md_ »

ulzeraj wrote: post #329
Animats wrote: post #180

Tether is back up to around $0.98, but volume is high. Somebody is pouring cash into Tether to support the price. Similar over at UST. Price is back up to $0.60, but volume is far above normal. Remember, with a stablecoin, there is no upside to holding . Any indication of risk means it's time to get out. Even if Tether has enough reserves to get the price back to $1, there will be substantial cashing out. That's why…

> Remember, with a stablecoin, there is no upside to holding. As always people around here tend to see the world from their point of privilege. If you are in Turkey, Sudan or Venezuela right now there is a huge upside in holding a stable coin pegged to the dollar. Only 13% of the world population is lucky enough to live on a stable democracy with a stable economic system.

In principle, there's no reason someone like Revolut can't just offer virtual (but backed by segregated client assets) accounts with "real" USD to people living in those countries.

It may be a compliance issue, of course. If you want to stay on the good side of the US Treasury, compliance could be expensive, especially in certain countries.

But the basic premise here is that USDT's risk premium is worth it as the cost of avoiding compliance, which, sure, I guess.

Re: Tether starting to lose its peg too, after Terra did

#344

Post by pmyteh »

ulzeraj wrote: post #329
Animats wrote: post #180

Tether is back up to around $0.98, but volume is high. Somebody is pouring cash into Tether to support the price. Similar over at UST. Price is back up to $0.60, but volume is far above normal. Remember, with a stablecoin, there is no upside to holding . Any indication of risk means it's time to get out. Even if Tether has enough reserves to get the price back to $1, there will be substantial cashing out. That's why…

> Remember, with a stablecoin, there is no upside to holding. As always people around here tend to see the world from their point of privilege. If you are in Turkey, Sudan or Venezuela right now there is a huge upside in holding a stable coin pegged to the dollar. Only 13% of the world population is lucky enough to live on a stable democracy with a stable economic system.

If you live in a country with an unstable currency but without strong capital controls, the upside can be had by holding dollars. And that comes without the risk that your known-to-be-a-bit-dodgy nearly-dollar collapses.

Re: Tether starting to lose its peg too, after Terra did

#345

Post by sgjohnson »

shafyy wrote: post #55
adhesive_wombat wrote: post #30

The 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 prosecu…

> So, no, they don't deserve to lose their money to these assholes.

Yes they do. But for reasons other than that. They also typically have extremely poor risk management (or are completely oblivious to it), and more importantly, they are buying a financial instrument they don’t even understand.

Re: Tether starting to lose its peg too, after Terra did

#346

Post by prox »

leodriesch wrote: post #211
prox wrote: post #173

Earlier quoted context omitted.

So why would one want to have Luna when you got Terra? I know Terra is backed, I know Luna is speculation, not any different from doing a roulette game.

Terra does not move in value. It’s like owning cash vs owning stocks. The cash is less risky but it’s value does not change (apart from inflation). Stocks are more risky but may give you profit over time.

But could I trade Terra outside of this system? And say to my buddy, here is 50 Terra, and he expect it to be 50 dollars? And wouldn’t that also create an economic impetus to trade it a like a stock?

Re: Tether starting to lose its peg too, after Terra did

#347

Post by pyinstallwoes »

dgellow wrote: post #337
pyinstallwoes wrote: post #318

Earlier quoted context omitted.

It’s instant given it’s guaranteed. If that doesn’t follow then it topples under its own promise.

It’s not guaranteed at all. Tether made it abundantly clear they give no guarantees they will redeem your USDT. It also isn’t instant. This is public knowledge and has been well documented for years. Tether is likely to be the least trustworthy actor in the entire industry.

Sorry by instant I meant expectation of receivables. I also am arguing that is a bad assumption.

Re: Tether starting to lose its peg too, after Terra did

#348

Post by seydor »

id wrote: post #143
seydor wrote: post #137

I don't know why i think it is a good thing that these ambivalent coins are being extinguished? It is catharsis to realize that bitcoin cannot be compatible and coexist with legacy fiat systems

It's already back to $1. But sure, every volatility in any shitcoin (even crypto bros make fun of USDT) must mean Bitcoin is being "extinguished".

i m not talking about bitcoin but about "stablecoins". I think this whole shakeup is good for bitcoin

Re: Tether starting to lose its peg too, after Terra did

#349

Post by pjc50 »

ckastner wrote: post #336
pjc50 wrote: post #323

Earlier quoted context omitted.

> Surely you just mint the tokens in exchange for dollars Step 1: find someone willing to give you dollars in exchange for a token that's guaranteed to be worth something between 0 and 1 dollars. Step 2: find a bank willing to let you be a money transmitter for millions of anonymous pseudo-dollars whose owner you have no idea of, setting off every single money laundering alarm in the building.

> Step 2: find a bank willing to let you be a money transmitter for millions of anonymous pseudo-dollars whose owner you have no idea of, setting off every single money laundering alarm in the building. This was the biggest red flag behind Tether to me, where we are talking about not millions but billions of pseudo-dollars. The risk profile is beyond anything reasonable that a bank could or would accept. Tether minti…

The billions of dollars of _backing_ should show up somewhere. https://twitter.com/dsquareddigest/status/140291428628503347...

> again - who is on the CP desk at Tether? Who is their account manager at Goldman Sachs? Who do they talk to at, say, the GE corporate treasury? Commercial paper is a short term money market that has to be managed and rolled - you can't just buy and hold the bonds anonymously.

Dan's argument is that the alleged size of their holding implies doing a lot of business, which should be being done by humans making phone calls to each other, and the gossip network doesn't seem to be able to locate any such people. Given that there are market participants whose job is e.g. "today I need to sell $100m of three month commercial debt to someone, time to start calling", one of them ought to know who's running the Tether business.

That nobody can see them in the market is a red flag.

Re: Tether starting to lose its peg too, after Terra did

#350

Post by throwmeariver1 »

epolanski wrote: post #281
shafyy wrote: post #55

Earlier quoted context omitted.

> 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 prosecu…

> billions of dollars spent in advertising Sunday I was watching Formula 1. Crypto.com Miami GP was the name of the event, starting straight full of crypto.com ads. Watching Inter vs Juventus Italian Cup final: crypto.com event sponsor, with Inter sponsoring Inter fan tokens. It's interesting how desperately crypto space needs $ and euros.

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