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Tether starting to lose its peg too, after Terra did

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Re: Tether starting to lose its peg too, after Terra did

#121

Post by nikanj »

turtledove wrote: post #59
rtpg wrote: post #32

Earlier quoted context omitted.

You need to show up with $100k to do the redemption. Granted if you did the round trip with only $10k you’re looking at peanuts in arbitrage but it _is_ a way for them to prevent real arbitrage that feeds into itself. I bet the fact that people wanting to short don’t believe they have the funds doesn’t help. But hey if you are a millionaire short tether might be worth setting up the recurring trade out!

So wait, assuming I had a hundred k, and they were willing and able to pay out, I could buy 97k of tether and redeem it for 100k? Just an instant 3% return? This seems like there's no way they are opening themselves up to arbitrage like this.

Playing an arbitrage like that is the ELI5 version of how George Soros made a billion dollars

https://historyofyesterday.com/the-day-george-soros-broke-th...

Re: Tether starting to lose its peg too, after Terra did

#122

Post by sgt101 »

What's the bullshit about auditors and Lehmans? Lehman's assets ended up being more valuable than expected after it went bust. What killed it was that it ran out of cash because it hadn't provided for the market conditions that cropped up . Discarding the utter nonsense that Goldman's were on about (7 sigma market shift my arse) this was in the class of understandable accidents. The problem is/was that these understandable accidents can't happen to institutions that are systemically important.

Re: Tether starting to lose its peg too, after Terra did

#124

Post by can16358p »

kristopolous wrote: post #75
can16358p wrote: post #50

Earlier quoted context omitted.

I'd definitely put a significant amount of money to buy it at $2K, and almost literally everybody I know would too.

Then it won't hit 2k unless you only believe that and wouldn't actually act on it. Not calling you dishonest, it's just intentions and actions aren't always as connected as we want to think

I'd probably buy more before it reaches 2K anyway. I was talking more like in a hypothetical scenario where I wake up in the morning and BTC is 2K.

Re: Tether starting to lose its peg too, after Terra did

#125

Post by xmprt »

thematrixturtle wrote: post #76

It's hard to overemphasize how big a deal the Tether peg breaking would be (is?). At $78B, it dwarfs UST/Terra, and it's supposed to be an asset-backed stablecoin, not a risky algorithmic boondoggle like UST. If Tether plunges, it will take the broader crypto markets with it. Emphasis on the "supposed to be", since many, many, many unanswered questions have been raised about Tether's reserves and they've previously b…

Can someone explain stablecoins to me? Most online explanations talk about how the currencies are "pegged" to various assets/real world currencies/physical objects/algorithms/cryptocurrencies, however they never explain how the pegging is done.

What is happening right now that is causing the price to fall, what prevented it from falling over the last few years, and why isn't that thing preventing it from falling now?

Re: Tether starting to lose its peg too, after Terra did

#126

Post by NavinF »

Nursie wrote: post #102
NavinF wrote: post #85

Earlier quoted context omitted.

> Seeing USDT at 0.97 temporarily doesn't mean much more than there is an insane amount of money exiting right now Eh you might be right, but there are orders executing at 0.95 now. Will you buy in for a “free” 6% ROI? I was planning on buying a couple of GPUs, but now I think I should wait a bit just in case ETH crashes lol Edit: Yeah you should have put your money where your mouth is. It’s back up to 0.988.

> just in case ETH crashes lol Down about 20% in the last 24 hours so ... is that a crash?

Nope, that’s pretty normal given how volatile ETH can be. But with another 20% drop, we might see retail prices for GPUs: https://www.metaculus.com/questions/9561/end-of-the-gpu-shor...

Either way I don’t wanna buy in before a potential dip :)

Re: Tether starting to lose its peg too, after Terra did

#127

Post by EGreg »

OP here. Note to everyone visiting our forum via the link… you are free to make an account and comment there, if you wish. The forum is about “Web4” — moving beyond Web3 ponzi schemes with an emphasis on social impact and utility of crypto.

I have since added a comment there, emphasizing the broader danger for crypto:

If Tether drops this could undermine the thesis that Bitcoin and other similar cryptos are good stores of value, because currently their value comes 1% from their utility and 99% from the collective belief (HODL etc.) which is circular and self-reinforcing, similar to various religions etc.

The “full faith and credit of the United States” or the exchangeability of banknotes for gold isn’t the main factor that has been backing the money we use. Real-world currencies that enjoy mainstream adoption in a given area are actually backed by goods and services they can be exchanged for readily in a certain area. Not so for cryptos (excluding services of remote workers such as software developers, which does represent a serious economy).

Here is what we would need to do in order to move the crypto space towards web4 and finally gain mainstream adoption of crypto in the real world:

https://intercoin.org/proposal.pdf

Re: Tether starting to lose its peg too, after Terra did

#128

Post by 5350-uiop-1130 »

ryanSrich wrote: post #108
5350-uiop-1130 wrote: post #44

Load ze tether fud. I'm no fan of USDT, and don't hold it but the same thing happened in the May 2021 crash. I think it's just the high volume of people selling right now cause it to depeg. I think if it goes too far below you will see the major exchanges go into "maintenance mode" since they're all deeply invested into keeping it alive.

Right. It’s fairly trivial for the exchanges to disallow a sell order for a stable below a certain price. That’s an obvious thing they would do if things start to really spiral here.

They did it briefly for UST(erra) at 0.7

Re: Tether starting to lose its peg too, after Terra did

#129

Post by astrange »

gzer0 wrote: post #107
nrp wrote: post #88

Earlier quoted context omitted.

USDT is now <$0.95, so the arbitrage opportunity is getting more exciting by the minute. It will be very interesting to see how long they can hold out against that.

Where are you seeing this? It's above $0.97 07:31:58 UTC Thursday, May 12, 2022

It was down to .949 then bounced again.

https://coinmarketcap.com/currencies/tether/

Re: Tether starting to lose its peg too, after Terra did

#130

Post by altdataseller »

qbasic_forever wrote: post #38
unsupp0rted wrote: post #17

Earlier quoted context omitted.

Would BTC be worth buying at sub-$2k? I never saw the use-case for it. I’d sooner use a faster, cheaper, more energy-efficient, more centralized crypto like XLM or XRP. But even then: for payments it’s hard to compete with Visa/Mastercard for speed and safety. And as a store of value all crypto is crazy volatile. If BTC goes sub $2k, would anybody reasonably want it anymore or would the emperor have no clothes?

There's probably still some value in it for darknet activities like sales of illicit goods, ransom payments, etc.

I think BTC will always be a gambling ecosystem at minimum. There will be ebbs and flows between it crashing and spiking for its entire lifetime.
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