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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

#541

Post by lupire »

Nition wrote: post #383
mwill wrote: post #191

Earlier quoted context omitted.

Do people in crypto sincerely believe Tether is backed? I'm not being sarcastic here, I'm genuinely asking. I'm a bit of a skeptic of how the crypto market has developed overall, and the intentions of the major players, so I keep reminding myself that I'm biased, but I haven't believed Tether is even remotely close to being fully backed for a long while, and I've just sort of assumed everyone who's 'bought in' to the…

The pinned top post on reddit.com/r/tether is titled "Tether has always been fully backed and the assurance opinion made available today confirms it once again, and puts Tether ahead of the industry on transparency."

That's just like Tether's opinion, man.

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

#542

Post by lupire »

h2odragon wrote: post #466
xur17 wrote: post #443

Earlier quoted context omitted.

> There are people "in crypto" who believe the FDIC will make good any losses on their investments Do you have a source for this? I'm heavily involved "in crypto", and have not seen any indications of beliefs like this.

Source: A couple of conversations with people in real life. If circumstances had been different these people would've been pushing Amway or similar.

Cryptocurrency is Amway for boys.

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

#543

Post by Tao332 »

gilbetron wrote: post #532
jmyeet wrote: post #455

Earlier quoted context omitted.

I actually hate people disavowing themselves of responsibility here. While there is definitely some shady stuff in Crypto (particularly NFTs, which seem to be 99% scams), there's a certain level of personal responsibility required here. People saw the meteoric rise of Bitcoin and got a serious case of FOMO. Everyone wanted to be on the next Bitcoin. This, ultimately, is the American Dream: to get rich by doing nothin…

> (particularly NFTs, which seem to be 99% scams) What is the 1% you think aren't scams?

I guess it's like the 99.999% label effectiveness of hand sanitizer. We all know it's really 100%, but the best we can say is "we see no evidence of one that's not a scam".

Or perhaps every single one has a core of 1% sincere intention at its heart. After all, you can rather confidently say you have a receipt.

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

#544

Post by lupire »

FeepingCreature wrote: post #207
randomsearch wrote: post #197

Earlier quoted context omitted.

Surely it is very difficult for a company to "guarantee" anything about the price of a commodity sold in a large open market. There are all sorts of reasons prices go up and down, it seems hubris to imagine you can tether anything. Even national governments struggle to do this. https://en.wikipedia.org/wiki/Black_Wednesday

Theoretically, they could guarantee it by just holding all dollars they are given originally. A price is just an abstraction for the willingness to buy and sell. If you know there are 1000 of some token in the world, and you have 1000 of some item, you can guarantee that people will always be able to buy one item for one token - by selling your items to them at that price. But of course, just holding the dollars make…

Credit cards do it by charging transaction fees.

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

#547

Post by ptero »

emteycz wrote: post #478
ptero wrote: post #463

Earlier quoted context omitted.

> There are valid stablecoins like USDC (they hold sufficient reserves) Those reserves are sufficient until they are not. There are always risks of losing the peg and anyone investing in them should be aware of and track the main ones. My 2c.

How is it any different from a bank? (I live in a country with well done digital currency regulation that is comparable to what banks have to do - let's not limit this to the case of Tether only).

Which country and which stablecoin do you have in mind, if I may ask; just curious.

A big difference with banks is that in most countries with well regulated banking the government will step in to bail out the account holder in a registered bank if that bank goes under. While most government officials will sing and dance if a stablecoin (which complicates their monetary decisions and, if big enough, can even arbitrage those away) fails.

Government support is not the only thing that matters, but it is an important thing to consider when comparing a stablecoin vs fiat.

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

#548

Post by ceejayoz »

norswap wrote: post #539

The speculation in this thread is silly. While Tether is certainly opaque (you could say shady), it's incredibly doubtful that it's unbacked to a significant extent. Even if it's only backed at 50% (which would be really shocking to me), it would take 39B$ to flow through the system to actually cause a depeg. That's very unlikely, and just the logistics of it means it would leave a lot of time to Tether to clear the…

> Consider that being "nakedly" unbacked (no underlying assets) in any meaningful capacity would qualify Tether's leadership for a quick trip to prison — as they've repeatedly said they were fully backed.

They said on their website they were regularly audited, too, and never completed one. There’s years worth of clear lies from Tether.

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

#549

Post by panphora »

KoftaBob wrote: post #471
nstart wrote: post #454

Earlier quoted context omitted.

It's easy to trade on crypto platforms with stable coins. A lot of people will typically buy tether and then use tether to buy other coins using the exchange of their choice. It works the other way around too when you want to store your value in a predictable form if a currency like bitcoin is doing a dip. Just convert your bitcoin to usdt and hold it there till btc starts going back up.

So it's meant to bypass the slowness of ACH and other aspects of the traditional banking system that the USD is limited by? Interesting.

Also, a lot of banks wouldn't work with crypto companies to provide them liquidity. So, stablecoins came in and said: "we'll be your liquidity!"

It only works if the stablecoins can get you your USD back at the end of the day though, which is what's being tested right now.

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

#550

Post by microtherion »

hluska wrote: post #138
EGreg wrote: post #73

Earlier quoted context omitted.

A year ago I advocated this “riskless” strategy on HN… if anyone actually listened to me, would you be up 1,000,000% right now? https://news.ycombinator.com/item?id=26106281

If that is meant to be a joke, it’s actually quite funny. Good job. If you meant that seriously, it’s extremely poor quality advice. Leverage is neither free nor cheap. And taking 100% leverage is obscenely risky. Your characterization of it as ‘risk free’ is the most dangerous part. At 100% leverage, small swings could lead to calls you simply cannot afford.

BTW, the assumption that Tether would not go substantially above $1 is incorrect. Tether has occasionally traded as high as $1.32 — of course these were only brief glitches, but sufficient to completely wipe out short traders.

Any suggestion that such glitches could have been engineered by the exchanges who are closely connected to Tether is, of course, nothing but malicious slander.

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