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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#71

Post by ShaneMcGowan »

JumpCrisscross wrote: post #48
ShaneMcGowan wrote: post #42

Earlier quoted context omitted.

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.

Exactly why I used the word "allegedly", lol

Re: Tether Withdrawals Top $10B

#72

Post by arcticbull »

kolinko wrote: post #70
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?

In tether’s case this is the same - withdrawals through it’s operator for fiat cash take tether off the market and lower it’s market cap. A more accurate description would be „withdrawals minus deposits”, but it’s quite obvious that this is what is meant.

It depends. Tether lies constantly, and has lied many times. We have NYAG and CFTC settlements to that effect.

The point parent is making, AFAIK, is that without actual audits (that they have promised for years were only months away) we have no idea if they actually processed $10B of withdrawals. Or whether they simply nuked $10B of unbacked Tethers from orbit. Maybe they printed $10B, used it to buy Bitcoin, then sold the Bitcoin back for USDT and nuked the USDT? We have no way to know without a formal audit.

Re: Tether Withdrawals Top $10B

#73

Post by arcticbull »

hermitdev wrote: post #69
arcticbull wrote: post #61

Earlier quoted context omitted.

This is honestly the most asinine remark. Tethers are supposed to be backed by $1 in assets. You're complaining that dollars are created out of nothing - they're not, of course, but even if they were: When Tether holds less than $1 of backing assets for each $1 of USDT in circulation it's worth strictly less than the $1 you're deriding. It is this gap we're talking about. So your comment isn't just wrong, it's comple…

> Banks are backed by the FDIC which in turn is backed by the Fed, you cannot have a bank run anymore. It's not possible. Yes, it is possible. FDIC doesn't insure all deposits. Typically you're capped at X thousands across all your accounts . I'm not sure what the current value of X is, 250? That said, a bank run is improbable. Also, be careful with cash holdings at investment institutions. Those are typically not FD…

You are right. That's fair and an important distinction.

FDIC insurance is, standard, $250,000 per depositor, per insured bank, for each account ownership category. [1]

Brokerage balances are SIPC insured against brokerage defaults, but not a money market fund imploding. [2]

[1] https://www.fdic.gov/resources/deposit-insurance/brochures/d...

[2] https://www.sipc.org/for-investors/what-sipc-protects

Re: Tether Withdrawals Top $10B

#74

Post by Ekaros »

drumhead wrote: post #64

We're in the get out while you still can phase. At some point they'll suspend conversion and holders will be stuck with something virtually worthless. It's like watching a landslide in its early stages, as soon as enough people realise what's going on it's going to be too late.

It is specially relevant to get out as there is no upside or very minimal upside... Why ever hold tether... If real money is an option.

Re: Tether Withdrawals Top $10B

#78

Post by retube »

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?

well it's not due to price changes, 1 USDT = 1$, so yes there are less coins in circulation.

Poster below says Tether can create and destroy coins at will. They can certainly create them, not sure they can destroy them if in others wallets (and doing so would be a huge adverse news event). If they have destroyed coins can only be their own (in their own wallets) but I suspect that would also be transparent. My feeling is that yes there have been $10bn of redemptions.

Re: Tether Withdrawals Top $10B

#79

Post by User23 »

arcticbull wrote: post #61
tamrix wrote: post #52

Earlier quoted context omitted.

Quoted post unavailable.

This is honestly the most asinine remark. Tethers are supposed to be backed by $1 in assets. You're complaining that dollars are created out of nothing - they're not, of course, but even if they were: When Tether holds less than $1 of backing assets for each $1 of USDT in circulation it's worth strictly less than the $1 you're deriding. It is this gap we're talking about. So your comment isn't just wrong, it's comple…

> You're complaining that dollars are created out of nothing - they're not, of course

They’re not?

> you cannot have a bank run anymore. It's not possible.

Right, because the banking system can always create dollars out of nothing to satisfy any outstanding liabilities.

> Banks are backed by the FDIC which in turn is backed by the Fed

The Fed is a creature of Congress. It’s all sovereign currency issuance.

Re: Tether Withdrawals Top $10B

#80

Post by E2EEd »

louloulou wrote: post #75

Quoted post unavailable.

Issuers of tether that is unbacked are defacto short. They thus embody your theory by design.

Is there any derivatives market in tether to allow an outsider to open/create a futures contract as a seller (thus, short) that gives them the obligation to deliver tether upon expiry?

I suspect that such matters don't work as you believe they do.

Shorting generally is done by professionals in regulated assets. Tether doesn't seem to meet that requirement. No professional will want to take on short risk in any size in an unregulated asset. Shorting, in theory, has unlimited downside risk (to negative infinity). This would actually be a factor in an unregulated market controlled by scammers, depending (in large part) on the net positions of underlying and derivatives by opposing parties.

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