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

blockworks.co

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

#81

Post by katcher »

OtomotO wrote: post #31
chii wrote: post #27

Earlier quoted context omitted.

> The interesting idea behind crypto once was to have a totally different system. the problem with this idea is that this idea of a "different" system is just merely going to evolve back into what we have today. The fundamental needs of a financial system doesn't change much, and what we have today is fit for purpose (mostly - there's efficiency to be had and red tape to cut).

It is until you're on a list, for whatever reason. When states and countries can just block your access to your bank accounts, because you're on the other side of interests, it gets...Interesting With a decentralised approach, such actions would've needed to be implemented in the real world, not merely by the flick of a virtual lever.

Like you're on a list for starting a genocide.

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

#82

Post by exdsq »

mindwok wrote: post #68
OtomotO wrote: post #31

Earlier quoted context omitted.

It is until you're on a list, for whatever reason. When states and countries can just block your access to your bank accounts, because you're on the other side of interests, it gets...Interesting With a decentralised approach, such actions would've needed to be implemented in the real world, not merely by the flick of a virtual lever.

Does this really matter though? Is it any different to drug lord having a tonne of dirty cash they can’t use anywhere because all the useful places you could put it want nothing to do with you? Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world.

> Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world.

Say this is true, how amazing would that be for countries without existing banking infrastructure to easily access it?

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

#83

Post by exdsq »

hiq wrote: post #67
ur-whale wrote: post #14

Earlier quoted context omitted.

> while BUSD and USDC have grown more. If I am not mistaken, USDC (coinbase) is properly and regularly audited for proof-of-reserves? Not so sure about Binance though. But at any rate, if capital starts to migrate to audited stablecoins from POS (and by that, I don't mean proof of stake) like Tether, sounds to me like a good thing.

> USDC (coinbase) is properly and regularly audited I've only found attestations just like USDT, where did you see an audit?

I’m sure I’ve seen an audit before but because Coinbase is a public company all finances have to be released so you should be able to see it there too?

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

#84

Post by uwuemu »

jen729w wrote: post #34
alpark3 wrote: post #16

Earlier quoted context omitted.

Easier to trade, no issues with tax&bank issues, and a lot of crypto exchanges charge to convert from crypto -> cash, whereas crypto -> crypto(stablecoin) is usually just exchange fees, less than the USD charge.

> 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…

That makes no sense. You pay taxes on realized gains (i.e. when you cash out), not unrealized ones... otherwise people like Elon Musk would have to pay tens of billions of dollars in taxes and sell off part of their stock to even be able to pay the tax (and probably ruin the company in the process). The same applies to crypto, and even though it's mostly not needed (you pay tax on realized gains in most countries and it makes common sense crypto would be similar), some countries alredy explicitly codified this, just to be crystal clear: You pay your taxes when you convert back to cash. That's the "taxable event". Same as when you sell your stock.

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

#85

Post by dalbasal »

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…

Either way, unless they are fully backed by USD... stablecoin is just an unregulated bank and it can run.

If that's not the case, they have as much rope as they have ability to liquidate. IE they can keep buying their own coin to defend the price for as long as they can.

Imo, stablecoins are a good example of everyone knowing the score but systemic risk accrues regardless. Stabkecoins just the worst kind of risk. Low risk/reward on a daily basis. Risk of catastrophic collapse on a bad day. It's the type of risk that gets financial companies/complexes into trouble.

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

#86

Post by ww520 »

The collateral for DAI are hihgly crypto correlated - 43.8% USDC, 32.1% ETH, 11.3% WBTC, 5.9% USDP, and others. ETH and WBTC are just Ethereum and BTC, both of which have dropped considerably recently. USDP somehow dropped to ~$0 since April. USDC is sworn to be 100% USD backed so let's take that at face value.

DAI is said to have 150% over-collateralization. ETH & WBTC have dropped more than half. Let's say just off by 50%. USDP and others seem got wiped out. $150 x (43.8% + 32.1%/2 + 11.3%/2 + 0%) = ~$98. That means $150 of collateral is worth only ~$98 now, not enough to back $100 of DAI for 1-to-$1 redemption.

Looks like DAI is at the verge of de-pegging.

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

#87

Post by Closi »

web4 wrote: post #62
abofh wrote: post #48

Earlier quoted context omitted.

And there are dozens and dozens of ways to do that: Venmo, PayPal, iPay, bill pay, ach, wire transfer, iBAN, payconiq, biscuit, cash, check, beer. And that's just in my neck of the woods, I'm sure I'm forgetting more.

and now there is one more way to do that: crypto. it is like asking “Why Does PayPal Exist When We Have iBAN?” obviously some subset of the globe finds it more useful than iBAN transfers for their needs (like setting up an online shop).

So you have friends that you transfer crypto to if they need to purchase something at a shop and don’t have the funds?

God that whole process sounds painful.

In the Uk we would just transfer the money across with a bank transfer as all banks support instant transfers which have no fees (including between banks).

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

#88

Post by jen729w »

jen729w wrote: post #34
alpark3 wrote: post #16

Earlier quoted context omitted.

Easier to trade, no issues with tax&bank issues, and a lot of crypto exchanges charge to convert from crypto -> cash, whereas crypto -> crypto(stablecoin) is usually just exchange fees, less than the USD charge.

> 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 didn't actually make a material profit

- But you still owe the taxman $3! (though you might be able to claim some sort of offset on your material loss of $RANDOM; IANAA)

- Now multiply all amounts by 10,000 and be sad

It's analogous to selling any asset. You buy gold, you sell gold at a profit and buy silver. You owe tax on the sale of the gold; you assume you'll pay this from the value you now hold in silver. The price of silver plummets. You still owe the tax on the sale of the gold.

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

#89

Post by nostrademons »

faeriechangling wrote: post #80
nostrademons wrote: post #72

Earlier quoted context omitted.

Note that Microsoft, Apple, Google, and Amazon all have $1T+ market caps, and before the recent market meltdown had multi-trillion valuations. Most Americans - particularly those who grew up before globalization - underestimate the scale of global markets. The U.S. is about 4% of the world's population and about 15% of global GDP. Anything that's Internet-based and has truly global appeal will be significantly larger…

So we should ignore that crypto is being used a fraction of the time as much as financial products that are worth several times less, because global markets are large? Should every product have a 1 trillion plus valuation because global markets are large? I just never actually see evidence that crypto has taken over global finance or is well on its way to doing so.

The point is that it's not being used a fraction of the time, because you take small fraction of total humans on earth (7B+) and it's a larger number than a large fraction of total humans in the US (320M). There are 100M crypto users in India, for example - that's only about 7%, but 7% of 1.5B is a larger number than 11.8% (market share of JP Morgan Chase, the largest U.S. bank) of 320M. Worldwide, crypto users are about 3% of the total population of most countries - but the U.S. as a whole is only 4% of the global population, so 3% of a global market is the same size as 75% of the U.S. market.

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

#90

Post by mellavora »

uwuemu wrote: post #84
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…

That makes no sense. You pay taxes on realized gains (i.e. when you cash out), not unrealized ones... otherwise people like Elon Musk would have to pay tens of billions of dollars in taxes and sell off part of their stock to even be able to pay the tax (and probably ruin the company in the process). The same applies to crypto, and even though it's mostly not needed (you pay tax on realized gains in most countries and…

Please check your local regulations on this. What Uwuemu says makes sense, but tax law does not have to make sense.

I might be wrong, but I believe the IRS views every transaction as a taxable event. Crypto -> crypto included.

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