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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#51

Post by thematrixturtle »

thkim wrote: post #19

OK so Tether went from 83bn to 73bn... what's the big deal? It's not like LUNA.

The big deal is that it's highly likely that Tether is backed up by way less than 83 billion in actual dollars. Let's say, for argument's sake, that they were 50% backed a week ago and had $40B in actual dollars.

If $10B was pulled out, that was into actual US dollars or equivalent, meaning they now have $70B backed up by $30B. If another $10B drains in the next week, it'll be $60B vs $20B. This incentivizes other holders of Tether to also pull out so they're not left holding the bag (= Tether's stash of dodgy loans etc), basically kicking off a slow-motion version of the same death spiral that we saw for UST/LUNA, until Tether runs out of assets and the whole crypto economy goes poof.

Re: Tether Withdrawals Top $10B

#52

Post by tamrix »

po wrote: post #46
stingraycharles wrote: post #28

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?

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.

No post body was provided.

Re: Tether Withdrawals Top $10B

#53

Post by compsciphd »

stingraycharles wrote: post #28

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?

if tether is backed 1:1 with dollars, how is it not withdrawals?

I.e. either the number of total coins in circulation has dropped (unsure how that is different than withdrawing) or its valuation has dropped (i.e. it lost its peg).

If they are just destroying coins, then they weren't 1:1 (possibly more than 1:1 before, but also possibly less).

Re: Tether Withdrawals Top $10B

#54

Post by JumpCrisscross »

dsl wrote: post #25
0xy wrote: post #7

The most concerning thing to me about Tether is they appear to own Chinese corporate debt for some unknown reason. Isn't that an insane amount of risk? In what universe is Chinese corporate debt even remotely liquid? It could be invested in Evergrande-adjacent companies for all we know. And you know when push comes to shove the Chinese government will throw foreign investors under the bus first.

The “too big to fail” businesses ended up being the best investments in the US. Commercial debt in China is guaranteed by proxy of the whole Chinese economy, because the government has direct ownership. The Chinese economy is in turn stabilized by the fact everything from your toothbrush to your car tires are made in China or using raw materials they control.

> Commercial debt in China is guaranteed by proxy of the whole Chinese economy

There is zero chance China prioritises offshore creditors in a crisis, a cryptocurrency exchange no less. This has precedent [1].

[1] https://www.wsj.com/articles/evergrande-is-leaving-foreign-b...

Re: Tether Withdrawals Top $10B

#55

Post by charcircuit »

CTDOCodebases wrote: post #49
dsl wrote: post #30

Earlier quoted context omitted.

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.

>Note there no mention of redemptions

They have mentioned paying out billions in redemptions on twitter.

Re: Tether Withdrawals Top $10B

#56

Post by CTDOCodebases »

0xy wrote: post #7

The most concerning thing to me about Tether is they appear to own Chinese corporate debt for some unknown reason. Isn't that an insane amount of risk? In what universe is Chinese corporate debt even remotely liquid? It could be invested in Evergrande-adjacent companies for all we know. And you know when push comes to shove the Chinese government will throw foreign investors under the bus first.

Most likely the commercial paper was issued by crypto companies who all simultaneously seem to be incorporated in Hong Kong and the biggest borrowers of USDT.

Re: Tether Withdrawals Top $10B

#57

Post by stormbrew »

tamrix wrote: post #52
po wrote: post #46

Earlier quoted context omitted.

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.

Quoted post unavailable.

No one's being told otherwise with banks though. The current backup plan for 19th-century-style fiat bank runs is central bank insurance and money printing, not a rather bold claim that the banks are holding on to tens of billion of dollars in cash and not doing anything with it.

Re: Tether Withdrawals Top $10B

#58

Post by medo-bear »

sgt101 wrote: post #27
medo-bear wrote: post #20

Earlier quoted context omitted.

there is a crisis in the usd though. it is fast losing its status as world reserve currency and coincidentally today we are at a footstep of ww3 ;)

Well - define fast. It's amazing to me that USD has been the world reserve currency for so long. Historically only silver has done better.

> define fast

as in the order of things in the world is changing so fast we have little time to analyze root causes. some examples

we went from being too scared to visit family because of a flu virus to pumping our chests against a super power in a blink of an eye

the us just approved a massive military package to ukraine that dwarfs anything given to israel and at a time us has trouble getting baby formula

forget crypto ... the world economy is on the verge of total collapse

and this all is tied to the is dollar because ... well ... of its current status as world reserve currency

Re: Tether Withdrawals Top $10B

#59

Post by CTDOCodebases »

jimmydorry wrote: post #26
0xy wrote: post #7

The most concerning thing to me about Tether is they appear to own Chinese corporate debt for some unknown reason. Isn't that an insane amount of risk? In what universe is Chinese corporate debt even remotely liquid? It could be invested in Evergrande-adjacent companies for all we know. And you know when push comes to shove the Chinese government will throw foreign investors under the bus first.

Who's saying it's Chinese debt? It's more likely to be loans to crypto ventures. Until it's disclosed, it's anyone's guess, but anyone claiming anything with certaintity, is full of it.

It was a rumour but seeing as the biggest holders of USDT are incorporated in Hong Kong it is very believable.

https://protos.com/tether-papers-crypto-stablecoin-usdt-inve...

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