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Tether starting to lose its peg too, after Terra did

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Re: Tether starting to lose its peg too, after Terra did

#71

Post by sshine »

shafyy wrote: post #55
adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

> If you've been honestly working on the assumption that it is, then you deserve to lose your (real) money to some crypto VCs on an island somewhere. The sad reality is that many poorer and financially illeterate people have been tricked by VCs and other grifters into this with billions of dollars spent in advertising. So, no, they don't deserve to lose their money to these assholes. These assholes need to be prosecu…

> many poorer and financially illeterate people have been tricked

I’m sorry, but it’s worse than that. Whenever I’ve said “Tether is a scam waiting to blow up, and the evidence is obvious”, none of my smart peers had anything to say, either.

The BTC price is hells high by this fake USD money printer.

At least people are collectively waking up.

Brrrr.

Re: Tether starting to lose its peg too, after Terra did

#73

Post by EGreg »

adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

A year ago I advocated this “riskless” strategy on HN… if anyone actually listened to me, would you be up 1,000,000% right now?

https://news.ycombinator.com/item?id=26106281

Re: Tether starting to lose its peg too, after Terra did

#74

Post by bhdy55 »

turtledove wrote: post #59
rtpg wrote: post #32

Earlier quoted context omitted.

You need to show up with $100k to do the redemption. Granted if you did the round trip with only $10k you’re looking at peanuts in arbitrage but it _is_ a way for them to prevent real arbitrage that feeds into itself. I bet the fact that people wanting to short don’t believe they have the funds doesn’t help. But hey if you are a millionaire short tether might be worth setting up the recurring trade out!

So wait, assuming I had a hundred k, and they were willing and able to pay out, I could buy 97k of tether and redeem it for 100k? Just an instant 3% return? This seems like there's no way they are opening themselves up to arbitrage like this.

Perhaps they want arbitrage in this case, because once people see this opportunity, it will make folks want to buy USDT in the market, which will bring the price back up (and remove the opportunity)?

Re: Tether starting to lose its peg too, after Terra did

#75

Post by kristopolous »

can16358p wrote: post #50
unsupp0rted wrote: post #17

Earlier quoted context omitted.

Would BTC be worth buying at sub-$2k? I never saw the use-case for it. I’d sooner use a faster, cheaper, more energy-efficient, more centralized crypto like XLM or XRP. But even then: for payments it’s hard to compete with Visa/Mastercard for speed and safety. And as a store of value all crypto is crazy volatile. If BTC goes sub $2k, would anybody reasonably want it anymore or would the emperor have no clothes?

I'd definitely put a significant amount of money to buy it at $2K, and almost literally everybody I know would too.

Then it won't hit 2k unless you only believe that and wouldn't actually act on it.

Not calling you dishonest, it's just intentions and actions aren't always as connected as we want to think

Re: Tether starting to lose its peg too, after Terra did

#76

Post by thematrixturtle »

It's hard to overemphasize how big a deal the Tether peg breaking would be (is?). At $78B, it dwarfs UST/Terra, and it's supposed to be an asset-backed stablecoin, not a risky algorithmic boondoggle like UST. If Tether plunges, it will take the broader crypto markets with it.

Emphasis on the "supposed to be", since many, many, many unanswered questions have been raised about Tether's reserves and they've previously been caught straight-up lying about them.

Re: Tether starting to lose its peg too, after Terra did

#77

Post by NhanH »

fastball wrote: post #47
NhanH wrote: post #5

Earlier quoted context omitted.

If Tether massively breaks the peg, there is a non-trivial chance of sub $2k BTC tomorrow

To me that math doesn't add up very well. Let's assume that 5 minutes from now, Tether drops to zero. Turns out Tethers were approximately 100% unbacked. There are currently ~$80B USDT in circulation. Even if you also assume 100% of USDT holders were also Bitcoin maxis who were using USDT as a "stable store of value" when they periodically want to exit their BTC position, the market cap of Bitcoin is still ~$500B, so…

It's more about the lack of confidence in crypto ecosystem and other second order effects (bitfinex going bankrupt, all others exchange on shaky ground etc) rather than the direct selling of btc/usdt

Re: Tether starting to lose its peg too, after Terra did

#78

Post by senko »

turtledove wrote: post #59
rtpg wrote: post #32

Earlier quoted context omitted.

You need to show up with $100k to do the redemption. Granted if you did the round trip with only $10k you’re looking at peanuts in arbitrage but it _is_ a way for them to prevent real arbitrage that feeds into itself. I bet the fact that people wanting to short don’t believe they have the funds doesn’t help. But hey if you are a millionaire short tether might be worth setting up the recurring trade out!

So wait, assuming I had a hundred k, and they were willing and able to pay out, I could buy 97k of tether and redeem it for 100k? Just an instant 3% return? This seems like there's no way they are opening themselves up to arbitrage like this.

>This seems like there's no way they are opening themselves up to arbitrage like this.

That's what defending the peg means.

Re: Tether starting to lose its peg too, after Terra did

#80

Post by gerikson »

frozenport wrote: post #66
adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

How are VCs making money? They invested $$$ and the company became insolvent? Don't the investors loose?

VCs are just as susceptible to being fooled as anyone else.
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