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Top stablecoins shed $7B in May as traders redeem tokens en masse

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Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#291

Post by NelsonMinar »

Animats wrote: post #25

The big question with Tether has been, if they are holding commercial paper, whose commercial paper? Traders who deal in commercial paper of real companies that do real stuff don't see Tether present in that market. The dollar amounts are too big to hide. The suspicion is that their "commercial paper" is high-interest loans to other cryptocurrency companies. With the whole crypto sector in decline, those loans are at…

No the big questions with Tether are: do they have backing assets? How much? And where are they? Whose commercial paper is a second tier question.

In August 2021 The Economist estimated Tether to be leveraged 383-to-1. That's incredibly unstable. https://www.economist.com/leaders/2021/08/07/why-regulators-...

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#292

Post by lottin »

krzyk wrote: post #284
lottin wrote: post #164

Earlier quoted context omitted.

If this is true, it simply means your tax code has a giant loophole that allows people avoid paying tax on capital gains by simply swapping an asset for another.

Why? You eventually have to pay it when you cash out (or buy service, goods with crypto). If you wait you loose tax returns for the amount you invested in crypto (with each year you have it halved). Basically this is the same as in case of stock market. You don't pay taxes until you sell stock. And here stock is whole crypto market.

I buy 100 USDC. I use these to buy some crypto-currency. 6 months later, I sell the crypto-currency for USDC, making a 10% profit. I sell the USDC for USD. Notice that I have made no profit from the sale of USDC, which is (supposedly) the only taxable event in this series of transactions. I bought 110 USDC worth $1 each, and sold 110 USDC worth $1 each. And I don't even have to sell the USDC for USD, I can buy stuff directly with USDC.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#293

Post by unityByFreedom »

thelamest wrote: post #151
nikanj wrote: post #143

Earlier quoted context omitted.

Crashes are a huge wealth transfer from the optimistic to the opportunistic. They’re very good for the few

True, but they’re still a negative sum event. (Putting aside libertarian-ish arguments, ironically overrepresented in crypto, that in the long term a crash is a healthy garbage-collection event.)

Also, I doubt you can predict a crash and make bank on it without having a whole bunch of people point in your direction. You'd have to have been speaking about it publicly prior to and have had zero inside information on some too-big-to-fail organization failing. I know people feel the US justice system doesn't hold the wealthy accountable, but I also think the wealthy are pretty good at knowing where the line is drawn. You can have all the money in the world but it's no fun if everyone's out to get you.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#294

Post by exdsq »

searchableguy wrote: post #155
chii wrote: post #108

Earlier quoted context omitted.

this is already being done via mobile phones. Crypto doesn't solve the problem of being unbanked. In fact, the requirement that you need good internet speed for crypto to run locally means it's even harder for a place without infrastructure to participate.

In India, everyone has a phone even if they do not have a roof, bank account, proper 3 meals a day, etc. Bank accounts also require minimum balance, address and identity proof which is hard to get for some, local branch is necessary to open an account due to regulation and quality can vary wildly even for urban centres. > In fact, the requirement that you need good internet speed for crypto to run locally means it's…

This. So many people who dislike crypto also assume the world looks like the US - access to banking, trust in their government, trust in their central bank, access to international finance… If the entire world looked identical to the US then I can understand it’s not as useful. If the entire world ran on regional versions of M-Pesa…

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#295

Post by Grimburger »

jen729w wrote: post #88
jen729w wrote: post #34

Earlier quoted context omitted.

> no issues with tax&bank issues Sure about that bit? This may be the perception – that holding your assets in 'the crypto system' avoids tax issues – but the taxman will disagree. Swapping $BTC for $USDC or whatever your tether of choice is is a 'taxable event'. You've sold one security in exchange for another. It doesn't matter that they're both crypto. Now, it might be harder for the taxman to detect this event, w…

Sorry all, should have been specific: Australia. https://www.ato.gov.au/General/Other-languages/In-detail/Inf... But be careful! Actually read what your local tax office puts out. Assume nothing: it can be very easy to get yourself in to trouble. For example: - You buy BTC @ $1 - You exchange BTC @ $11 for $RANDOM - You just made $10 :-) and you owe the taxman ~$3 (if you're in Australia) - $RANDOM falls to ~$0 - So…

You handwave away $RANDOM falling to zero as something which doesn't count as a capital loss that you can carry forward to offset all future gains?

As another Australian you should really speak to an accountant if you ain't going to claim that massive loss because this is either comically wrong or intentionally misleading advice.

It's just like any other capital gains event and very simple to grok.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#296

Post by louracryft »

hoschicz wrote: post #261
axlee wrote: post #166

Earlier quoted context omitted.

You end up paying the transaction fees, which are insane. On top of the interest.

You don't on chains such as Polygon, Fantom, etc etc etc. Really only Ethereum is very expensive; you don't have to use it.

I'm just a lurker on crypto issues, but if you're avoiding transaction fees by trading on a company's private chain, aren't your assets also held by that private company?

So if you wanted to redeem your assets from a private chain, wouldn't those trades need to interact with the company's holdings, rather than the wider marketplace?

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#297

Post by Grimburger »

FireBeyond wrote: post #192
viraptor wrote: post #8

Earlier quoted context omitted.

> Isn't Tether's cap alone around 10 times that? Tether's cap is not the same as Tether's available liquidity to redeem the token. We don't know what's the limit of withdrawals they can handle in reality.

Yeah, about that. Used to be that you couldn't redeem unless you were a whale. Unless you weren't a US national. Unless you'd given 90-120 days notice. Unless there was a fee paid. People literally put up bounties hunting any successful redemption of Tether. Especially since, and this is as true now, as it was then: "Tether makes no guarantees, promises or arrangement that the Tether stablecoin is or will be redeemab…

You can redeem $0.30 worth of tether right here:

https://trade.kraken.com/charts/KRAKEN:USDT-USD

There's very good reason to do a lot of KYC and set limits on people who want to get USD for their USDT. The last person who tried to operate such a business was locked up in a US prison for nearly a decade. Good motivation to not deal with retail customers and the slow burn US justice system don't you think?

https://www.nytimes.com/2012/10/25/us/liberty-dollar-creator...

What you want to happen to void this criticism would get the Tether execs put in prison. Though I guess that's what some people here secretly want anyway.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#298

Post by CTDOCodebases »

aaaaaaaaata wrote: post #280
CTDOCodebases wrote: post #213

Earlier quoted context omitted.

Why would anyone buy Tether? Because the most liquid trading pairs and futures use USDT. The same companies who borrow USDT from Tether happen to be the same people who run exchanges or act as market makers.

They did — is that still true? Will it still be true next month or next year? Seems to me the slow abandonment of Tether has become faster.

Maybe. Or maybe the exchanges/market makers are buying back USDT in order to pay back their loans to Tether.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#299

Post by kgwgk »

JohnJamesRambo wrote: post #268
jimmydorry wrote: post #253

Earlier quoted context omitted.

The temptation is too great. If the stablecoin has a non-zero administrative cost, someone has to pay it. And if no-one wants to pay it, then it is going to have to invest a portion of the dollars it holds to make up the difference (and to ultimately reward the creators / seed investors). There are probably no 100% cash-backed stablecoins.

This is the breakdown for USDC. Luckily for crypto, USDC keeps climbing the charts and USDT will be a memory soon. Bad money is always exchanged out for good. >Jeremy Allaire @jerallaire 3/ As of 12:00pm EST Friday, May 13, 2022, the USDC reserve consisted of $11.6 billion cash (22.9%), $39.0 billion U.S. Treasuries (77.1%), for a total of $50.6 billion (100%), and there were 50.6 billion USDC in circulation

> $39.0 billion U.S. Treasuries

Par value or market value? If it’s the former the current value is surely less.

Re: Top stablecoins shed $7B in May as traders redeem tokens en masse

#300

Post by LatteLazy »

unityByFreedom wrote: post #290
LatteLazy wrote: post #103

Earlier quoted context omitted.

In this case the damage will be limited to a bunch crypto companies. The issue before was it hit companies we relied on for things like mortgages and current accounts. Crypto companies can just be allowed to fail and no one except their users will be effected. Hence they are not regulated. So even keeping GS (which was limited to big banks and a few similar institutions) wouldn't have made any difference. Not that ke…

> In this case the damage will be limited to a bunch crypto companies. The issue before was it hit companies we relied on for things like mortgages and current accounts. Crypto companies can just be allowed to fail and no one except their users will be effected. I don't buy the argument that crypto lives in a vacuum. People valuing that asset are part of the global economy. The question is, is crypto really as valuab…

At the risk of getting semantic...

Value is not a single concept. The value of something to me is different to to you. And for both of us it changes over time. Value cannot really be defined, let alone measured.

So we are stuck with prices. And prices are sort of connected to value. But the connection is very non linear.

We can know the price of crypto (or gold or shares or credit default swaps). But it's value is purely a matter of personal taste...

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