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Tether's Troubles in November 2022

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Re: Tether's Troubles in November 2022

#111

Post by acdha »

psychlops wrote: post #90
acdha wrote: post #76

Earlier quoted context omitted.

> It's depressing to me that there is such a vocal group of people cheerleading the demise of an industry that seeks to improve the financial system on a global scale. Truly disheartening are the financially disenfranchised (and what I believe) young voices for whom any system would be better than the current. Look at it this way: the scammers are not doing that, at all. In fact, they are making it less likely that a…

Indeed. You are absolutely correct. To be clear, I'm no fan of Tether. This is just another anti-crypto thread where I had time to post some thoughts. I suppose I've gotten jaded frontlining anything crypto. When I speak about it to people, mostly they are interesting in what's going to the moon. I have little patience for those conversations. Actually, I can't think of more than a handful that actually want to know…

It reminds me a lot of the 1998-2000 period where people were looking for hot stocks but not doing any research beyond Internet forums and seeing whether a number had gone up.

Some of the people caught out deserved mockery but many were well-marketed to and far out of their league. I’m thinking of a sales guy I knew who mentioned one morning that he’d “invested” all of their wedding money and was now far below water.

Re: Tether's Troubles in November 2022

#112

Post by grey-area »

wmf wrote: post #43
grey-area wrote: post #24

Earlier quoted context omitted.

Yes tether is an obvious lie, and it’s now just a question of when, not if, they collapse.

If Tether is 87% backed they'll be fine; they can find some way to hide that shortfall. (To be clear this is illegal and I want Tether to die but we need to acknowledge the realpolitik of the crypto market.)

1. They are not backed at all, esp when coin prices collapse 2. Even if partially backed loss of confidence will be catastrophic.

Re: Tether's Troubles in November 2022

#113

Post by gruez »

djbusby wrote: post #23
gruez wrote: post #17

Earlier quoted context omitted.

>If they are owned by Bitfinex can they not front-run the Bitfinex order book to guarantee their stops will hit their target? They know the bitfinex order depth for every asset so they can for example buy into bitcoin and then calculate exactly when they must get out. This makes no sense to me. Can you rephrase/elaborate what you mean by this?

Bitfinex (B) sees orders incoming for BTC or other currency. Then B acquires for $X. Then B fills the order to clients at $X.03 Boom, $0.03 free money. Multiply by scale of their client base.

That's just front running though? I'm not sure how tether has to do with it. You can pull that off with or without creating a stablecoin with questionable backing.

Re: Tether's Troubles in November 2022

#114

Post by andirk »

xur17 wrote: post #60
andirk wrote: post #51

Why do people use Tether scamcoin over Gemini stablecoin GUSD? It's supposedly backed 1:1 GUSD:USD and has US-regulated books. I get 5-8% interest on it and hasn't had an issue for its handful of years of being issued.

> I get 5-8% interest on it and hasn't had an issue for its handful of years of being issued. I agree that GUSD is a good, low risk stablecoin choice, but that's only if you directly hold it. If you're depositing it into an interest earning account, note that you're taking on additional lending risk (which I'd highly recommend against right now).

Agreed! I do hold it all in my earning account and if borrowers skip town, then I lose.

I treat it as a low risk/low reward in my portfolio. Coincidentally, my "earnings" I pulled out recently was almost the exact opposite amount of current inflation so it's like a hedge against inflation.

Re: Tether's Troubles in November 2022

#115

Post by andirk »

shuckles wrote: post #71
andirk wrote: post #64

Earlier quoted context omitted.

No idea. I transferred a bunch of coins from Bittrex and Coinbase, sold some for USD for a nice profit, put that USD in to GUSD, and a month ago pulled out last year's interest of ~$1500 USD to buy some beautiful pendant lights, brass faucet, and a mediocre range hood for my new kitchen remodel.

And what economic activity did the borrower engage in to pay out more than risk-free interest?

No idea but I doubt they were bombing brown people and guarding Arab oil investments for profit, nor were they attempting coups in resource-rich countries. All that happens with my USD savings account.

Re: Tether's Troubles in November 2022

#116

Post by xur17 »

andirk wrote: post #114
xur17 wrote: post #60

Earlier quoted context omitted.

> I get 5-8% interest on it and hasn't had an issue for its handful of years of being issued. I agree that GUSD is a good, low risk stablecoin choice, but that's only if you directly hold it. If you're depositing it into an interest earning account, note that you're taking on additional lending risk (which I'd highly recommend against right now).

Agreed! I do hold it all in my earning account and if borrowers skip town, then I lose. I treat it as a low risk/low reward in my portfolio. Coincidentally, my "earnings" I pulled out recently was almost the exact opposite amount of current inflation so it's like a hedge against inflation.

If you're holding it on Gemini Earn, I highly recommend withdrawing, even if only for the next few months.

Gemini Earn deposits into Genesis Trading, and they have admitted to having direct exposure to FTX ($175M [0]). While they can likely weather that loss, I have concerns about other indirect exposure they may have in the coming weeks. I don't think we've seen the end of the FTX story.

If I were you, I'd take the money out yesterday, and hold it in either US Treasuries (6 month pays 4.45%), or put it into a liquid money market while this all blows over. The extra couple of percentage points you'll earn does not at all seem worth the elevated risk right now.

[0] https://twitter.com/GenesisTrading/status/159083659438203289...

Re: Tether's Troubles in November 2022

#117

Post by Stention314 »

pyinstallwoes wrote: post #78
andirk wrote: post #47

Earlier quoted context omitted.

8% of every dollar in your pocket a year ago no longer exists.

If you have 100,000 BTC and it goes down to 0, you still have 100,000 btc.

I love this.

That's such a beautiful example why Bitcoin is garbage.

If you have 100.000k shells and have 0 value you still have physically 100.000k shells you can still do things with.

While you have literally a private key representing 100.000k bitcoins with no value.

Re: Tether's Troubles in November 2022

#118

Post by ummonk »

Though it’s not clear that their “risk-on” assets are actually risky, it’s certainly weird that they haven’t built up more equity. Between interest they earn on short term treasuries, and being able to arbitrage periodic seller panics, a normal non-scammy strategy should be able to generate healthy profits.

Re: Tether's Troubles in November 2022

#119

Post by ummonk »

andirk wrote: post #51

Why do people use Tether scamcoin over Gemini stablecoin GUSD? It's supposedly backed 1:1 GUSD:USD and has US-regulated books. I get 5-8% interest on it and hasn't had an issue for its handful of years of being issued.

How can a fully backed coin offer 5-8% interest without being a scam? The math doesn’t work out since you can’t get 5-8% yields from short term treasuries.

Re: Tether's Troubles in November 2022

#120

Post by dorkwood »

rhino369 wrote: post #66
JumpCrisscross wrote: post #21

Earlier quoted context omitted.

> will be the true extinction level event for this era of crypto People keep saying this, but it runs counter to the history of gambling. As long as enthusiasts have money, the game will keep going.

I've said this like 5 times and I've been wrong 5 times. But eventually there won't be any more bagholders.

New ones are born every day. We will never run out.
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