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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#111

Post by Axsuul »

medo-bear wrote: post #58
sgt101 wrote: post #27

Earlier quoted context omitted.

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 cr…

None of these things matter at all. Thanks to the US military, USD as the reserve currency remains.

Re: Tether Withdrawals Top $10B

#112

Post by danielrpa »

arcticbull wrote: post #66
stormbrew wrote: post #57

Earlier quoted context omitted.

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.

> The current backup plan for 19th-century-style fiat bank runs is central bank insurance and money printing... It's the FDIC. The FDIC was created in the wake of the Great Depression to make sure bank runs stopped. And in the last ~100 years since it was created they've succeeded. [1] Banks pay into the fund, which is used to make depositors whole in the event of insolvency. If the fund is exhausted, the FDIC also h…

There's more than the FDIC. The government has shown over and over that it will bailout and/or nationalize financial institutions that could bring the entire system down (such as AIG). I'm not saying this system is perfect, but it's a LOT more robust and time tested than any cryptocurrency we have today.

Re: Tether Withdrawals Top $10B

#113

Post by dougmsmith »

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…

No post body was provided.

Re: Tether Withdrawals Top $10B

#114

Post by retube »

astrange wrote: post #97
retube wrote: post #78

Earlier quoted context omitted.

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 feelin…

1 USDT has been less than $1 ($.998) for the last two weeks on coinmarketcap.

sure. but that's immaterial to the discussion here.

Re: Tether Withdrawals Top $10B

#115

Post by kravvall »

anm89 wrote: post #99
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.

And I assume you are substantially short these markets then given that you know this for a fact and it's trivially easy to become wealthy one you know this for a fact? I don't even disagree that there are potentially major issues here but stating this as a fact is just silly.

It is a question of when, not if.

If you do some research on Tether you realize that there is so much fishy stuff going on, it's surreal. This HAS to implode at some point.

Re: Tether Withdrawals Top $10B

#116

Post by charcircuit »

ATsch wrote: post #87
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.

I have absolutely no way to substantiate this, but I feel like if you needed to be able to say that you technically had a few billion in reserves as cheaply as possible but didn't actually think you'd ever need to liquidate it, buying the riskiest debt you could might be a great way to do that.

I'm not following your logic. $1 worth of debt is worth $1 no matter how risky it is. The risk is built into how much it is worth. Risky debt is high risk high reward. Since these funds are backing a stablecoin it doesn't make sense to go for high risk plays with that much money.

Re: Tether Withdrawals Top $10B

#117

Post by kravvall »

User23 wrote: post #79
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…

> 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.

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

Can they though? Don't they create new liablities with this? Effectively ending in "finance debt with more debt" scheme that has eventually got to collapse?

Re: Tether Withdrawals Top $10B

#118

Post by kravvall »

retube wrote: post #114
astrange wrote: post #97

Earlier quoted context omitted.

1 USDT has been less than $1 ($.998) for the last two weeks on coinmarketcap.

sure. but that's immaterial to the discussion here.

No, it's not. Because that could be a possible motivation for tether to remove supply, to artificially increase the price again, to get close to peg. And as far as I understand, nothing in Tether is transparent, so I'm not sure if they can't just destroy their own tokens without someone being sure that this is happening.

Re: Tether Withdrawals Top $10B

#119

Post by kravvall »

compsciphd wrote: post #53
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).

Nobody, not even tether claims that tether is backed 1:1 by dollars.

Re: Tether Withdrawals Top $10B

#120

Post by sgt101 »

Axsuul wrote: post #111
medo-bear wrote: post #58

Earlier quoted context omitted.

> 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 cr…

None of these things matter at all. Thanks to the US military, USD as the reserve currency remains.

Agree - the power to open markets, guarentee acccess and obtain resources is what underpins it. As the Russians are showing us, no one else has a fraction of that capability.
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