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Anyone Seen Tether’s Billions?

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Re: Anyone Seen Tether’s Billions?

#21

Post by arcticbull »

PretzelPirate wrote: post #20
arcticbull wrote: post #8

Earlier quoted context omitted.

The last time Bitwise tried to list an ETF, they revealed to the SEC that 95% of all bitcoin trading volume was fake. If the SEC permits a real BTC ETF that would represent a serious failure on their part, IMO, and I agree the potential for Tether contagion would increase materially. [1] [edit] this financial cancer can’t get excised quickly enough. The longer we wait the more will get hurt. [1] https://cointelegraph…

> The last time Bitwise tried to list an ETF, they revealed to the SEC that 95% of all bitcoin trading volume 95% of Bitcoin trading on *unregulated* exchanges was fraudulent. There’s a reason why people don’t use CoinMarketCap anymore and it’s precisely because it shows bad metrics from fraudulent exchanges.

They’re all unregulated. Coinbase was included in their list. The word “unregulated” was a flourish added by cointelegraph as a distraction.

> Of the 81 exchanges evaluated in the report, only 10 provide volume figures that are legitimate, according to Bitwise.

Coinbase is regulated as a money transmitter, like Venmo.

[edit] what I believe they meant was that 95% of all trading volume was fake and 100% of that came from the less reputable exchanges.

Re: Anyone Seen Tether’s Billions?

#22

Post by rossdavidh »

The biggest news, buried near the bottom:

"After I returned to the U.S., I obtained a document showing a detailed account of Tether Holdings’ reserves. It said they include billions of dollars of short-term loans to large Chinese companies—something money-market funds avoid. And that was before one of the country’s largest property developers, China Evergrande Group, started to collapse. I also learned that Tether had lent billions of dollars more to other crypto companies, with Bitcoin as collateral. "

Re: Anyone Seen Tether’s Billions?

#23

Post by vmception »

moneywoes wrote: post #9

Are there any legitimate stable coins?

MIM - they lean into the “magic internet money” meme because they don’t need to convince people of its seriousness. It is collateralized by asset backed and interest bearing cryptos that earn transaction fees such as xSUSHI

DAI - but the MakerDao system has worse collateral than MIM, no interest bearing assets to my knowledge, but that can easily change with votes

Re: Anyone Seen Tether’s Billions?

#25

Post by [deleted] »

arcticbull wrote: post #19
h2odragon wrote: post #17

Earlier quoted context omitted.

Dunno, I hear they're planning a big dilution soon. https://www.axios.com/trillion-dollar-platinum-coin-mint-jan...

Increase in supply is not inflation. It’s quite unlikely to cause any actual measurable dilution. But let’s pretend for a second. Given that all major stable coins are pegged to or benchmarked against the dollar, any inflation in the dollar would carry over into stable coins 1:1 so the remark would be a nonsequitur.

[deleted]

Re: Anyone Seen Tether’s Billions?

#26

Post by HillRat »

dustintrex wrote: post #5
nevi-me wrote: post #2

The article talks about Tether's issued coins making it as large as one of the top 50 US banks (if it were a bank). How many banks does the US have?

Even more damning is this: > about $30 billion of its dollar holdings are invested in commercial paper—short-term loans to corporations. That would make Tether the seventh-largest holder of such debt, right up there with Charles Schwab and Vanguard Group. "Would", because nobody in those markets has seen them.

At some point I suspect that they’re going to be exposed as holding billions of dollars in ultra-high-risk junk Chinese ABCP. Even before the current economic and political climate, that stuff was toxic — you can buy dodgy SCP for about a penny on the dollar given how poorly regulated the China commercial debt market is.

Re: Anyone Seen Tether’s Billions?

#27

Post by CPLX »

throwoutway wrote: post #7

If this goes on for a few more years, with broader investment from traditional investors (ETF), when Tether collapse I half-suspect that the cryptocurrency markets will bring the NYSE down with it in the fall as people sell to cover losses

It's actually an interesting thought experiment to try to figure out what would (will?) happen when all this comes crashing down.

I am an extreme skeptic on all things crypto, I don't hold any and I think it's basically a gambling fad. But, with that said, I grudgingly recognize that it now has some powerful establishment interests behind it and things that have that tend to defy the laws of gravity, often forever. So I have no idea what will happen.

But it's interesting to contemplate scenarios. One obvious one might be that crypto values would be highly correlated to the values of specific stocks that are in favor by crypto enthusiasts (aka "meme stocks" or maybe Tesla, etc) and that if there's a full on crypto crash those specific stocks will be annihilated by margin calls, since it's the same set of retail investors.

That's one hypothesis, I'm sure there's many other interesting ones.

Re: Anyone Seen Tether’s Billions?

#28

Post by NelsonMinar »

I don't understand how Tether has survived this long. Bitfinex and Tether sure look transparently like a fraud, all the way back to the "no really we have $1 in the bank for every Tether but you can't audit us" days. And yet it continues to occupy its role as the underpinning of most cryptocurrency markets. Why hasn't it blown up yet? My best guess is that it's useful to everyone taking in money from new retail investors. Also there's no clear financial incentive for blowing it up; there's no way to easily short Tether, for instance.

This article talks about the way Tether is loaning out what reserves they have. The Economist looked at this phenomenon and found Tether has a 383-to-1 leverage. That's going to be a complete disaster the moment there's a major blip in the economy. Say, a major Chinese real estate company going broke. Or interest rates in the West finally going up and causing a market correction. Maybe that's what will blow it up.

The good news is the Economist also thinks the inevitable cryptocurrency disaster will be bad but won't destroy world economies. " its holders would lose hundreds of billions of dollars but that the fallout would be manageable." I sure hope that happens before this tower of unregulated investments gets so big that when it falls over it crushes the real economy.

But don't worry folks, this is all good for Bitcoin.

https://www.economist.com/leaders/2021/08/07/why-regulators-...

Re: Anyone Seen Tether’s Billions?

#30

Post by reactspa »

dustintrex wrote: post #5
nevi-me wrote: post #2

The article talks about Tether's issued coins making it as large as one of the top 50 US banks (if it were a bank). How many banks does the US have?

Even more damning is this: > about $30 billion of its dollar holdings are invested in commercial paper—short-term loans to corporations. That would make Tether the seventh-largest holder of such debt, right up there with Charles Schwab and Vanguard Group. "Would", because nobody in those markets has seen them.

This is sounding eerily like the Jeffrey Epstein case, where he was this storied super-successful trader and speculator, but there was no paper trail of the trades that made him into a billionaire.
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