191–200 of 465 posts
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I've never shorted or taken out crypto loans, but you could theoretically: - Take out a loan of USDT, using a stablecoin you trust as collateral - Immediately trade all USDT into your stablecoin - If the USDT price crashes, buy it up to repay the loan. e.g. Binance lets you borrow 800k USDT with 1.23m collateral. Over 180 days, interest paid would be 36k. Say USDT crashes and you repay your loan at 10c/USDT - you wou…
>- If the USDT price crashes, buy it up to repay the loan. What happens if trading is effectively halted, so it's simply no possible to buy the USDT back later?
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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.
I'm not very well versed in how selling debt works, but the way I assume it works is the following: Say someone still owes me $1M over the next 10 years, but I think that there's now only a 50% chance of the debt being repaid. It would make sense for me to try and sell that debt for at least $500k to get a guaranteed immediate return, right? And then that person could say that they hold $1M dollars, even though it's…
Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…
> whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. Buy Tethers with what? If the money is in fact saved in regulated banks or other such instruments, there's nothing liquid left to defend the peg on the exchange. Instead, the standard "backed stablecoin" approach is to make money with a small spread on redemptions/creation, while allowing others to do that hard work. Te…
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Folks who want their fiat.
What does "pegged" even mean unless Tether is always willing to pay 1 USD for one? Then who would sell their tether for $0.99, at a loss?
Eventually, the US will figure this out and make a USD crypto that will be used as THE stablecoin. It seems obvious to me that a stablecoin needs a solid governmental backing, since there is no profit in it and you need unlimited deep pockets in case of a run. The advantage is then that the USD remains the world's premier reserve currency, even into the digital age.
The system is perfect, why change it to liquefy the dumb investment a few crypto lunatics made ?
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Important to note that they can only nuke that is under their control right now, and presumably Bitfinex' (and perhaps some other entities). Everything that is in wider circulation can only be removed through actual withdrawals.
That's assuming they were paid dollars for those USDT by exchanges. An exchange could borrow the USDT, and when returned, they could be burned - with no dollars changing hands.
Eventually, the US will figure this out and make a USD crypto that will be used as THE stablecoin. It seems obvious to me that a stablecoin needs a solid governmental backing, since there is no profit in it and you need unlimited deep pockets in case of a run. The advantage is then that the USD remains the world's premier reserve currency, even into the digital age.
Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…
[1] Especially in a near-zero interest rate environment.
Eventually, the US will figure this out and make a USD crypto that will be used as THE stablecoin. It seems obvious to me that a stablecoin needs a solid governmental backing, since there is no profit in it and you need unlimited deep pockets in case of a run. The advantage is then that the USD remains the world's premier reserve currency, even into the digital age.