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Anyone Seen Tether’s Billions?

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Re: Anyone Seen Tether’s Billions?

#371

Post by arcticbull »

soared wrote: post #96
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…

> by a group including former child star and accused sex offender This makes your argument seem conspiracy-theory-esque, despite your links having some quality information. That quote is more akin to clickbait than it is a valid point in your argument.

It was a little ad hominemey, for color. I'll own that criticism.

Re: Anyone Seen Tether’s Billions?

#372

Post by thefreeman »

johanneskanybal wrote: post #364
wpietri wrote: post #207

Earlier quoted context omitted.

> I keep waiting for Yakety Sax to start playing, but to the true believers, it never does, and apparently all us nay-sayers are just neanderthal and don't see "the vision". It reminds me of the initial dot-com bubble, where anybody who asked questions was also painted as not getting it. Ditto the mortgage bubble, come to think of it. Then when the inevitable crash comes, nobody apologizes. It's either "who could hav…

I don't think that's fair, these concerns have been around for probably five years plus and get a lot of media attention. As someone invested in this area it does get a bit old and counter productive being scared of the various boogie mens while missing all the enormous upside so far. After all, tether is 3% of total market cap, I think it's fair to say the effect if they disappeared tomorrow would be a bit bigger th…

Quoting tether's total market cap is a bit disingenuous. What % of daily trade volume is tether?

Re: Anyone Seen Tether’s Billions?

#373

Post by ikeboy »

arcticbull wrote: post #362
ikeboy wrote: post #241

Earlier quoted context omitted.

Very easy to do on FTX or aave for basically as much size as you'd like. Yes, it costs 4-5% a year to short. If it blows up in the next few years you'd make a killing though.

If USDT blows up FTX goes down with it, and they won't pay you out. That's just a 4-5% annual donation to SBF.

Why do you think that? They treat USDT as any other coin, has no special status in the system. FTX is very well capitalized. Can you show me even napkin math that shows FTX going under if USDT blows up in a realistic scenario? (Going from $1 to $0 instantly isn't realistic.)

Re: Anyone Seen Tether’s Billions?

#374

Post by ikeboy »

raesene9 wrote: post #337
ikeboy wrote: post #240

Earlier quoted context omitted.

It's very easy to short tether, it costs around 4-5% a year. You can do it directly on FTX, or you can do it on ethereum by borrowing tether on aave against, say, USDC, and then selling it for USDC. You can do this in significant size, 8 figures+ if you'd like.

Shorting Tether would be an amazingly dangerous thing to do, especially on a closely associated exchange like FTX. If Tether goes completely bust, it's likely that closely associated exchanges won't be able to cover the bets. Until that happens, they control all the levers and can just move the market as necessary to make you lose your bet.

https://news.ycombinator.com/item?id=28798944

Also don't understand what moving the market means in this context. The market is at 1:1 for USDT/USD, if there's selling pressure that would lead USDT to trade under $1, the only way to manipulate that is to buy lots of USDT from everyone who wants to sell, which tends to support the peg. Not even sure why that's called manipulation. If there's a real panic and tether turns off withdrawals there's no way anyone has the money to buy everything up at peg.

Re: Anyone Seen Tether’s Billions?

#375

Post by ikeboy »

xondono wrote: post #282
ikeboy wrote: post #240

Earlier quoted context omitted.

It's very easy to short tether, it costs around 4-5% a year. You can do it directly on FTX, or you can do it on ethereum by borrowing tether on aave against, say, USDC, and then selling it for USDC. You can do this in significant size, 8 figures+ if you'd like.

> You can do it directly on FTX I’m no expert, but wouldn’t this be unrealizable? If tether were to fall it’s not crazy to think it would take with it most exchanges, given how most of them use USDT for maintaining operations.

https://news.ycombinator.com/item?id=28798944

FTX in particular has standard coin/USD pairs and also USDT pairs. No reason that USDT collapsing would cause FTX to go bust. Alameda and other market makers might lose a ton if they didn't see it coming.

Re: Anyone Seen Tether’s Billions?

#376

Post by NelsonMinar »

acdha wrote: post #142
NelsonMinar wrote: post #89

Earlier quoted context omitted.

It's now unflagged and back on the front page. Weird.

This happens for most things which are critical of cryptocurrencies, unproven COVID-19 treatments, etc. There's a group of people who try to flag them off of the homepage but the moderators appear to block that after confirming that the article is of legitimate interest.

It's a shame folks flagging things in bad faith have that much power.

Re: Anyone Seen Tether’s Billions?

#377

Post by arcticbull »

ikeboy wrote: post #373
arcticbull wrote: post #362

Earlier quoted context omitted.

If USDT blows up FTX goes down with it, and they won't pay you out. That's just a 4-5% annual donation to SBF.

Why do you think that? They treat USDT as any other coin, has no special status in the system. FTX is very well capitalized. Can you show me even napkin math that shows FTX going under if USDT blows up in a realistic scenario? (Going from $1 to $0 instantly isn't realistic.)

Why isn't going from $1 to $0 not realistic? Tether is completely centralized and has the ability to prevent token transfers on all major networks it operates on. They regularly add to their blacklist, much more often than other stablecoins. Were it seized by the DOJ, they could simply freeze all transfers subject to proof of AML/KYC and source of funds analysis. That would nuke the market for them immediately.

I believe FTX has some 10+ billion USDT on hand. That'll put a serious hole in their balance sheet. Not to mention whatever would happen to their futures insurance fund when the collateral evaporates. I'm trying to find my source for their balance sheet size, will follow up.

Re: Anyone Seen Tether’s Billions?

#378

Post by NelsonMinar »

drfxyjhdyfrhgc wrote: post #287
dustintrex wrote: post #279

Earlier quoted context omitted.

That 100% payout will be in crypto, whose value in USD terms is going to tank if Tether implodes. And that's assuming the lending platform in question survives the carnage.

The payout will be in a different stablecoin. USDC won't collapse with Tether.

That's nonsense. When something as big as Tether falls the entire sector is going to fall apart. Everyone will run for the exits, USDC holders as well. I would not coount on Coinbase having enough real money to cover USDC redemptions. https://www.bloomberg.com/news/articles/2021-08-11/coinbase-...

Re: Anyone Seen Tether’s Billions?

#379

Post by yokem55 »

arcticbull wrote: post #361
smabie wrote: post #251

Earlier quoted context omitted.

Also you can trade the USDT/USD swaps as well

You can only do that at exchanges that are seriously exposed to systemic Tether risk and will also collapse if USDT goes down. So even if you're right, you won't get paid on USDT/USD swaps. Shorting USDT at Bitfinex is like shorting Caesars chips at Caesars . News flash: if Caesars goes bankrupt just which cashier do you think is gonna give you which dollars?

At this moment you can deposit defi borrowed usdt into Coinbase pro, swap it for usdc there, and then swap the usdc back to USD and withdraw to your bank account. Then if tether collapses you'd be able to pay back the borrowed usdt for pennies on the dollar.

Re: Anyone Seen Tether’s Billions?

#380

Post by SilasX »

qeternity wrote: post #307
ahtihn wrote: post #302

Earlier quoted context omitted.

> You’re already short USDT anytime you buy crypto in USDT terms (i.e. BTC/USDT That doesn't make any sense. If I buy BTC with USD and then transfer it to an exchange with a BTC/USDT pair, I'm not suddenly "short USDT". So I don't see why buying BTC with USDT directly makes me short USDT either if I didn't borrow the USDT but bought it with USD

> If I buy BTC with USD and then transfer it to an exchange with a BTC/USDT pair, I'm not suddenly "short USDT". It does, it just doesn’t make you short against USD which is what you’re thinking of. It only makes you short vs. BTC which we expect to collapse in price as well. This is why you need the other leg. > So I don't see why buying BTC with USDT directly makes me short USDT either if I didn't borrow the USDT b…

This is the kind of thing that would have been helpful to explain before using the notation. At least if your goal was to help others understand.
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