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Tether Required Recapitalization in May 2022

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Re: Tether Required Recapitalization in May 2022

#231

Post by hiq »

ntoskrnl wrote: post #128
patio11 wrote: post #24

Earlier quoted context omitted.

It's remarkable that a stablecoin which was able to mostly maintain the peg for years at a time now needs to redefine what being pegged means, and that this state of affairs has continued for more than a week. That's why I mentioned it.

Peeking at the long term chart[1], I don't think 0.1% is notable. In Oct 2018, it bounced around ~1% under the peg for most of 2 months. Then in Dec 2018, it bounced around 1-2% over the peg for 2 months. A similar swing happened in Apr-Jun 2017. I'm actually surprised, I've never looked at this chart before and I didn't expect to see swings of several percentage points. But at any rate the current 0.1% is pretty tam…

On https://coinmarketcap.com/currencies/tether/historical-data/ you can see that all the highs for the past 7 days have been strictly under $1, has this ever happened before?

Re: Tether Required Recapitalization in May 2022

#232

Post by puranjay »

astoor wrote: post #71
axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

So Tether has become something like an international reserve cryptocurrency, which gives them an "exorbitant privilege"[0], meaning they can do pretty much whatever they want safe in the knowledge that everyone else will do everything they can to prevent them from failing because everyone else would have too much to lose if they did fail. That has kept it going for a long time, and might (or might not) keep it going…

By most measures, it appears that Tether is slowly going to die out and replaced by USDC. Among retail users, Tether has increasingly lost sway and is largely used only on exchanges (which is still massive, but not the only game in town anymore).

Roughly half of USDT is circulating on Tron, which is a dead chain. This TRC20 Tether is almost exclusively used for inter-exchange transfers (since fee is capped at $1/transaction)

On Ethereum, USDC is now bigger than Tether. Over a month, Tether on-chain supply has dropped nearly 12% [0]

[0] https://defillama.com/peggedassets/stablecoins

Re: Tether Required Recapitalization in May 2022

#233

Post by hiq »

ntoskrnl wrote: post #141
kasey_junk wrote: post #116

Earlier quoted context omitted.

Thats breaking the peg though! Tether says its 1 to 1 with the pegged fiat currency. It doesn’t say its .98-1.01. There are pegs that do this sort of range based pegging but Tether is not claiming that.

Tether's claim is that verified users can redeem USDT for USD 1:1 at https://tether.to/ . Exchanges like Kraken are secondary markets and Tether does not claim anything about them.

> verified users can redeem USDT for USD 1:1 at https://tether.to

This has been debunked for a while already, nobody believes that anymore.

Re: Tether Required Recapitalization in May 2022

#234

Post by tonguez »

steveBK123 wrote: post #156
zionic wrote: post #122

Earlier quoted context omitted.

>This is true for every pile of toxic crap that's ever been financially engineered. I have a radical idea that I'm fairly sure would get me killed if I ever stood a chance of implementing it: A complete ban on all non-productive financial schemes. We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society. The "futures trader" extracting value from the system…

I propose a ban on all non-productive trips by car. Only good people should be allowed to emit carbon unless for productive reasons that pass the carbon threshhold for the amount of carbon the trips will emit. Good people as defined by a social credit system. I will decide what is a productive reason & what is the carbon threshhold! People totally have the option of living under this type of government - it exists in…

“People totally have the option of living under this type of government - it exists in top down centralized places like China.”

you’re right, i much prefer to live under a decentralized government like the United States.

Re: Tether Required Recapitalization in May 2022

#235

Post by giaour »

axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

> As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine.

Doesn't that make Tether a fiat currency?

Re: Tether Required Recapitalization in May 2022

#236

Post by tyrfing »

runarberg wrote: post #112
PKop wrote: post #59

Earlier quoted context omitted.

If you just sit in Tether sure, but the ecosystem of stablecoins gives you access to DeFi yield opportunities with much better "passive" interest than bank deposits or treasuries, so the bet is a little more sophisticated than dollar for dollar.

I’m confused. Banks and credit unions pay interest on savings because they can loan or invest that money with higher yields then the interest they pay to the customer/member. How exactly do cryptocurrencies finance their DeFi yields to their investors? The only way I can think of is with the money of future investors, but that is a pretty blatant Ponzi scheme.

Loans.

Re: Tether Required Recapitalization in May 2022

#237

Post by giaour »

CyanBird wrote: post #220
JumpCrisscross wrote: post #50

Earlier quoted context omitted.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

Want to stick it to the man for real? Buy Iranian government bonds, Venezuelan government bonds, Bolivian government bonds, etc Will you get a return? Not all that likely (not unlikely either) , but you would indeed be sticking it to "the man" Buying tether? Ha heck no

I'm pretty sure the man will stick it back to you if you follow this advice.

Re: Tether Required Recapitalization in May 2022

#238

Post by dogecoinbase »

DebtDeflation wrote: post #215
dogecoinbase wrote: post #207

Earlier quoted context omitted.

Hah, good catch. Kind of can't believe he's still doing that after the last time [0] 0: The tweet: https://twitter.com/patio11/status/1241551327743770624 The, ah, assertion: https://twitter.com/patio11/status/1241553311024603140 > I am materially wrong about the most consequential thing I've had to have a view on in 15 years. You should probably degrade your estimate of my ability to think through complex problems. T…

Wait, so on March 25, 2020 he predicted that there was going to be a coronavirus pandemic (and that Japan would be impacted)? The WHO had already declared a global pandemic on March 12, 2020 and there was no reason to believe that Japan or any other country would be spared.

> Japan will face a national health crisis within a month.

(spoiler: they didn't)

Re: Tether Required Recapitalization in May 2022

#239

Post by giaour »

astoor wrote: post #71
axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

So Tether has become something like an international reserve cryptocurrency, which gives them an "exorbitant privilege"[0], meaning they can do pretty much whatever they want safe in the knowledge that everyone else will do everything they can to prevent them from failing because everyone else would have too much to lose if they did fail. That has kept it going for a long time, and might (or might not) keep it going…

You could save some time and keystrokes by just typing out "too big to fail."

Re: Tether Required Recapitalization in May 2022

#240

Post by rsync »

ceeplusplus wrote: post #223
rsync wrote: post #168

Earlier quoted context omitted.

"The "futures trader" extracting value from the system buying/selling futures has done no "real" work" Small farmers hedging next years crop would like a word with you ... ... and there are one hundred examples just like that. Did you ever convert foreign currencies in advance of an international trip when you saw the currency pair move favorably ? Have you ever bought an ETF ? Do you have a mortgage in the United St…

Comparing sophisticated market makers trading using their own money to "hedge funds" run by some rich guy's son charging 2 and 20 are hardly the same. The bank in Margin Call was packaging MBS out of mortgages, not speculating on the price of commodities using derivatives to gain leverage.

"The bank in Margin Call was packaging MBS out of mortgages, not speculating on the price of commodities using derivatives to gain leverage."

Correct. That's my point.

It's not merely that you can't have one without the other ... it's that you very likely wouldn't want to eliminate the (margin call guys) even if you could.

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