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Anyone Seen Tether’s Billions?

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Re: Anyone Seen Tether’s Billions?

#191

Post by qeternity »

altrus wrote: post #175
qeternity wrote: post #85

Earlier quoted context omitted.

Absolutely do not do this. Do not bet against the house inside casino walls. If you have enough capital to weather potential dislocations, the only real way to play this is to be long off shore (perps, probably) and short CME. This position is long BTC/USDT vs short BTC/USD, the net of which is short USDT/USD. The reason for doing it this way is if it doesn’t play out, or goes to 100k first, you’re just wearing a bit…

I don't entirely understand this; could you provide a concrete example, or actual trades, that could be involved in such a position? (I'm just curious how it would actually look like in practice.)

Binance: buy $1m BTC/USDT

CME: short $1m BTC futures (which are dollar settled and thus BTC/USD)

On Binance you are long BTC, and short USDT. On CME you are short BTC and long USD (implicitly on the fiat legs).

So if we add that up, the BTC positions net off and you’re just left with short USDT and long USD which is the desired outcome.

In practice, if Tether implodes I would expect everyone to sell Tether (by buying crypto with it) and then due to panic, to send that crypto to exchanges with fiat off ramps where they will then sell it. So the price of BTC on Binance goes to the moon, and the price on CME collapses. You will likely lose whatever money you had on Binance (your profit is denominated in worthless USDT and Binance is probably bankrupt at this point) however you should make multiples of that with your CME short.

This is all of course not investment advice and extremely hypothetical.

Re: Anyone Seen Tether’s Billions?

#192

Post by [deleted] »

qeternity wrote: post #191
altrus wrote: post #175

Earlier quoted context omitted.

I don't entirely understand this; could you provide a concrete example, or actual trades, that could be involved in such a position? (I'm just curious how it would actually look like in practice.)

Binance: buy $1m BTC/USDT CME: short $1m BTC futures (which are dollar settled and thus BTC/USD) On Binance you are long BTC, and short USDT. On CME you are short BTC and long USD (implicitly on the fiat legs). So if we add that up, the BTC positions net off and you’re just left with short USDT and long USD which is the desired outcome. In practice, if Tether implodes I would expect everyone to sell Tether (by buying…

[deleted]

Re: Anyone Seen Tether’s Billions?

#193

Post by acdha »

BLKNSLVR wrote: post #172
acdha wrote: post #141

Earlier quoted context omitted.

Who outside of the cryptocurrency industry would notice if they disappeared? Who outside of the automotive industry would notice if cars disappeared? That's your answer: pollution is still a concern but only one of those is balanced against significant real-world benefits for people other than the sellers.

The automotive industry is 100+ years old whilst Bitcoin is only 13 years old, so you can't fairly compare them on the basis of "who would notice". My previous skepticism of Bitcoin and cryptocurrency was due to short-sightedness. You almost have to dip your toes in, in order to understand its potential.

Okay, use the web. Within a couple of years of its creation it had transformed businesses in all kinds of industries, government, education, recreational activities, etc. By the time it was as old as Bitcoin, the world was completely different and people were walking around with web clients in their pockets; in contrast, the most impact Bitcoin has had outside of its own community seems to be that it can be slightly cheaper than Western Union to send money to another country.

Re: Anyone Seen Tether’s Billions?

#194

Post by fny »

adflux wrote: post #138
arcticbull wrote: post #33

Earlier quoted context omitted.

It took Liberty Reserve 7 years and 17 countries cooperating to get nuked from orbit. Tether was founded as Realcoin in 2014 by a group including former child star and accused sex offender Brock Pierce, so while it’s technically just rounding the 7 year mark, it didn’t begin in earnest until it was taken over by Bitfinex towards 2015 and didn’t become majorly problematic until 2016/2017 according to the NYAG findings…

Bennett has done a fantastic job. There WILL be a movie about this company when investors lose faith. Like next decades, "the big short".

But how exactly do you short stablecoins? You can't and even if you did the game is heavily rigged against you.

If you remember in the movie, Cohodes got his ass handed to him as banks margin called him out of his position and that's in a regulated market. These guys own their market and the exchange on which it originates. There's no way to even verify if they received dollars for every tether issued and by some miracle the yield on USDT is incredible. You'd be losing 4-5% a year guaranteed holding a short position.

Re: Anyone Seen Tether’s Billions?

#196

Post by fny »

SilasX wrote: post #84
arcticbull wrote: post #39

Earlier quoted context omitted.

Nope, occasionally exchanges will manipulate the price up to liquidate shorts - for instance the highest recorded trade price of USDT was about $1000 and dexes leave you at risk of flashbots and smart contract bugs.

DeFi exchanges operate algorithmically with published smartcontracts, so they can't be deliberately manipulated like that[1] -- can you link the example of the DeFi where USDT traded at $1000? Or were you just equivocating between DeFi and centralized exchanges in response to a comment that specifically suggested DeFi? [1] Which is not to say they can't be manipulated at all, but you'd have to go after the entire mar…

Here's a question, how do you guarantee that every USDT was backed by a dollar at origination? Say USDT holds a bond that defaults, what do they sell to offset the risk? Where does the 5% yield on tether even come from? This is the most plausible form of manipulation: unbacked liquidity. The only way you'll ever find out is with a bank run, and with massive yields and a hyped crypto space, it may be a while before that happens.

Re: Anyone Seen Tether’s Billions?

#197

Post by qeternity »

quickthrowman wrote: post #190
qeternity wrote: post #107

Earlier quoted context omitted.

Yes, I agree. But if all MMs withdrew but you had lots of other stickier liquidity, spreads might widen but it would cause a crash. Of course if Tether implodes, all the long term buyers will evaporate, which is my point: medium/long term price is dictate by swing and positional traders, not market makers. > Either that, or their bid will be 0, like on 0DTE options that are far out of the money. What? This doesn’t ma…

> What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Did you miss the “far out of the money” part of my comment? What’s the bid/ask on the Oct 8 SPX 4550C going to be at open tomorrow, assuming SPX opens around 4400? Bid 0.00, Ask 0.05 I also understand there is resting (and possibly hidden, depending on the order types allowed by th…

> What’s the bid/ask on the Oct 8 SPX 4550C going to be at open tomorrow, assuming SPX opens around 4400? Bid 0.00, Ask 0.05

Minimum price tick == 0.05 on ES options. I would sell you some for 0.01 but Globex won’t let me.

Re: Anyone Seen Tether’s Billions?

#198

Post by jkhdigital »

johnnyApplePRNG wrote: post #61
JohnHaugeland wrote: post #58

I don't understand why this is flagged

Me neither... I only got here by submitting the article (8 hours late!). The comments are great. This article should not be flagged.

The level of saltiness around this topic is nuts. I’m pretty sure that these comment threads result in a net negative to the total karma of HN users.

Re: Anyone Seen Tether’s Billions?

#199

Post by jkhdigital »

acdha wrote: post #141
cinntaile wrote: post #76

Earlier quoted context omitted.

Any economic activity is basically actively destroying the environment though. The big difference is that there are a few supply chain steps that get bypassed before value is created. I know I know, someone will take issue with that and say that no value is created with crypto when a coin gets minted and the rewards are distributed while value is created along each supply chain step when you manufacture a car. But if…

Who outside of the cryptocurrency industry would notice if they disappeared? Who outside of the automotive industry would notice if cars disappeared? That's your answer: pollution is still a concern but only one of those is balanced against significant real-world benefits for people other than the sellers.

The automotive industry, and the machines they create, produce orders of magnitude more pollution than crypto. It’s a poor choice of comparison for whatever point you’re trying to make.

Re: Anyone Seen Tether’s Billions?

#200

Post by torgoguys »

FireBeyond wrote: post #160
Ice_cream_suit wrote: post #120

LOL ! "The chief financial officer is Giancarlo Devasini, a former plastic surgeon from Italy who was once described on Tether’s website as the founder of a successful electronics business. The only reference to him that turned up in a search of Italian newspapers showed he was once fined for selling counterfeit Microsoft software. Elsewhere on the website, there’s a letter from an accounting firm stating that Tether…

Well, Bitfinex uses Deltec as their bank. A bank that claimed at the start of this year that they were "55 years old and whose customers were predominantly asset managers and high net worth individuals", until they did a website redesign (more on that below) and overnight were "70 years old". A bank that had a 33 year old "Deputy CEO" who gave interviews from his gaming rig. Who claimed to have graduated from HEC Lau…

Sounds like a dumpster fire.

The 55 years old/70 year old thing could have some legitimacy, kinda. Banks like to be seen as being very old, implying stability. There is a popular regional bank where I live that was established in the 1970s. But this bank says that it is more than 150 years old. Why? It turns out that it bought out a bank that was founded around 1860. Since that bank is now part of them, they reason, they have a history that goes back that far. Sketchy if you ask me, but apparently legal. (?) If Deltec bought an older bank, then maybe they are using the same justification.

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