Am I correct that it’s not necessarily $10B in withdrawals, as it is that the total market cap (valuation * total coins) dropped by $10B? Seems like an important distinction?
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Tether Withdrawals Top $10B
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Re: Tether Withdrawals Top $10B
#42Am I correct that it’s not necessarily $10B in withdrawals, as it is that the total market cap (valuation * total coins) dropped by $10B? Seems like an important distinction?
Since Tether is a stable coin™ allegedly backed by and pegged to the price of 1 USD.
So if the price is still $1 but the circulation has gone down by 10 billion, that means $10B worth of it has been cached out
Re: Tether Withdrawals Top $10B
#43Am I correct that it’s not necessarily $10B in withdrawals, as it is that the total market cap (valuation * total coins) dropped by $10B? Seems like an important distinction?
Yes, it just means tokens were removed from circulation. Doesn't mean someone has redeemed them. It might have been action by Tether itself also.
That is before they printed tokens without backing, used them to prop up market prices. And now they are pulling those out after likely making some gains when prices were high.
Re: Tether Withdrawals Top $10B
#44Wasn't Tether the one that was revealed to have only had enough backing for like 3% of its coins a few months ago? Surely that must be drying up now.
They likely have backing of more than 50% probably more than 80%. Although how much is liquid is unknown.
They only had $4.2B in cash during their last attestation. The rest was unknown treasuries and commercial paper.
Re: Tether Withdrawals Top $10B
#45OK so Tether went from 83bn to 73bn... what's the big deal? It's not like LUNA.
> what's the big deal? It's not like LUNA
It's not yet like Luna.
Just yesterday the Financial Times ran this story: "Binance promoted terraUSD as a 'safe' investment just weeks before the stablecoin and its counterpart luna collapsed in a $40bn wipeout that shook the crypto industry"[0]
[0] https://www.ft.com/content/d459f435-edff-412c-85a5-0961d50ab... / https://archive.ph/OQmjW
Re: Tether Withdrawals Top $10B
#46Am I correct that it’s not necessarily $10B in withdrawals, as it is that the total market cap (valuation * total coins) dropped by $10B? Seems like an important distinction?
All the people responding to you are missing the distinction too... They can create/destroy coins at will. They say that they only do this when customers receive/withdraw fiat but we all know that's not the case and they aren't truthful about it.
Re: Tether Withdrawals Top $10B
#47Wasn't Tether the one that was revealed to have only had enough backing for like 3% of its coins a few months ago? Surely that must be drying up now.
They likely have backing of more than 50% probably more than 80%. Although how much is liquid is unknown.
This exodus doesn't really prove anything about the composition of the assets, same way the money coming onto the books originally proved nothing.
Tether admits that most of their assets are made up of commercial paper (aka bonds issued by companies). Suppose the minted USDT was given to the companies issuing those bonds themselves, then to reverse this, you don't need USD. You can simply cancel the debt and burn the USDT without a single dollar changing hands in the entire process. But dollars do change hands -- as payment for Tether's service of continuing to keep USDT going so those corporates can exit cryptocurrency at some point, in the form of interest on the commercial paper.
If a major counterpart was Binance, for instance, Binance could offer no cash upfront, issue a bond for a billion dollars to Tether, accept USDT1bn in exchange, use USDT to buy bitcoin, sell the bitcoin as USDT1bn + profit (and convert that profit to e.g. USD), and hand back the USDT1bn + interest, & cancel the bond. That's essentially the running theory of Tether's operation. Money flows overall from whoever bought Binance's cryptocurrency, to Binance, and to Tether. And Tether maintains very little cash whatsoever, as there is no need unless everyone wants to redeem at once. And in this situation their plan is just to throw up their hands and say "we prioritise our customers" which is basically Binance and whoever their actual customers are, i.e. the issuers of commercial paper, not you.
Re: Tether Withdrawals Top $10B
#48Am I correct that it’s not necessarily $10B in withdrawals, as it is that the total market cap (valuation * total coins) dropped by $10B? Seems like an important distinction?
Since Tether is a stable coin™ allegedly backed by and pegged to the price of 1 USD. So if the price is still $1 but the circulation has gone down by 10 billion, that means $10B worth of it has been cached out
> if the price is still $1 but the circulation has gone down by 10 billion, that means $10B worth of it has been cached out
Tether being caught lying is practically perennial. Unless we have records showing someone receiving $10bn from Tether, it's safe to be sceptical of the claim.
Re: Tether Withdrawals Top $10B
#49This is either a good thing in that "wow, they atleast have $10B to redeem instantly" Or its a bad thing in that "welp, there's all the insiders exiting the boat first"
Redemptions are also done when exchanges need to offload Tether to buy other crypto currencies to fulfill orders. For what it is worth I have been getting a lot of emails from OTC brokers trying to fill BTC and ETH orders over the last few days.
Note there no mention of redemptions, just a reduction in the circulating supply.
My guess is the USDT was borrowed and Tether is holding less commercial paper now.
Re: Tether Withdrawals Top $10B
#50This is either a good thing in that "wow, they atleast have $10B to redeem instantly" Or its a bad thing in that "welp, there's all the insiders exiting the boat first"
It could be those, but nobody outside knows whether any Tether was actually redeemed though. They are alleged to have insider connections with a bunch of different parties so they could just have burned Tether that had been created from nothing and lent out to an insider.