Tether Required Recapitalization in May 2022 • Hacker News Board

Re: Tether Required Recapitalization in May 2022

#91

Post by TameAntelope » Fri, May 20, 2022, 5:03 PM UTC

deweller wrote: post #19

> As of this writing, on May 20th, it has yet to regain the peg This is misleading. Tether has consistently traded between $0.998 and $0.999 between May 13th and May 20th. See https://coinmarketcap.com/currencies/tether/ Is it trading at 0.1% lower than it was before the Terra USD collapse? Yes. Has it "lost its peg"? No.

I'm not an expert by any means on this topic, but for non-crypto assets that are pegged, going even 0.1% below the peg is a huge deal.

A peg is a peg, it's supposed to be more or less certain.

Re: Tether Required Recapitalization in May 2022

#92

Post by thebean11 » Fri, May 20, 2022, 5:03 PM UTC

rapsey wrote: post #84

gringoDan wrote: post #74

Earlier quoted context omitted.

USDC is legit: https://www.centre.io/usdc-transparency

Current market cap is 52 billion. Just where is that money?

Held by Circle and Coinbase in T bills I believe.

edit: more likely held by some holding company controlled by those two companies.

Re: Tether Required Recapitalization in May 2022

#93

Post by scrlk » Fri, May 20, 2022, 5:03 PM UTC

rapsey wrote: post #84

gringoDan wrote: post #74

Earlier quoted context omitted.

USDC is legit: https://www.centre.io/usdc-transparency

Current market cap is 52 billion. Just where is that money?

Apparently with BlackRock and BNY Mellon: https://decrypt.co/97795/blackrock-handle-circle-usdc-cash-r...

Re: Tether Required Recapitalization in May 2022

#94

Post by dwater » Fri, May 20, 2022, 5:05 PM UTC

kirse wrote: post #30

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 that want to prop up Tether That's been my personal conclusion as well but it led me to the next question of what # is the breaking point for these well-capitalized parties? I tried looking at the size of other well-known collapses like Enron, LTCM, Lehman Bros, etc. LB reportedly had $700B in assets and liabilities before the underlying asset devaluation precipitated the…

I don't have the time, but I'd love to see someone rewrite "Reminiscences of a Stock Operator" as "Reminiscences of a Crypto Operator". I don't think you'd have to change any of the scams, only the context. Partner with a good illustrator and it would make a lovely coffee table book.

https://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Opera...

Re: Tether Required Recapitalization in May 2022

#95

Post by phphphphp » Fri, May 20, 2022, 5:05 PM UTC

meirelles wrote: post #55

silly question, being USDT "only" 80B, why does it matter if it collapses? considering cryptos market cap is more than 1T, and 100B's wipeouts routine, sometimes during crypto winters (where we observe -80% across the board) or collapses such as Luna recently (>50B? no idea) Of course, panic would happen, but still. I think people would move on, forget, and continue believing whatever they want to just curious to rea…

Market cap is not the sum of all injected capital, it’s the total supply multiplied by the most recent value of a unit. For example, if you paint 2 paintings and sell them to me for $100 each, and then I sell 1 of them for $1000 to a third-party, the market cap of your paintings is $2000 ($1000 x 2 paintings) despite there only being $1100 dollars spent.

It’s plausible that there’s less than $80bn of USD in the crypto market and so tether could well represent every single dollar available. I don’t know if I’d argue that is the case, but it’s certainly plausible — and so it’s easy to see how a collapsing tether could take down the entire market, or at least, represent a far greater threat than the ~5% it represents in market cap numbers.

Re: Tether Required Recapitalization in May 2022

#96

Post by ceejayoz » Fri, May 20, 2022, 5:05 PM UTC

nootropicat wrote: post #88

Tether fud in 2022 is truly embarassing and slanderous. The only time they had real problems was when part of their money was stolen and confiscated with connection to Crypto Capital - which only happened because they were refused normal banking. The only way tether fails is if the situation repeats in some way - but it appears American government finally gave up on trying to destroy usdt. As long as the US governmen…

> which only happened because they were refused normal banking

They gave nearly a billion dollars to someone without a contract. That's a higher level of stupidity than just "we used a shady banking partner because we had no alternative".

Re: Tether Required Recapitalization in May 2022

#97

Post by russellbeattie » Fri, May 20, 2022, 5:05 PM UTC

microtherion wrote: post #14

billions wrote: post #7

Bitcoin is the real stable coin. Everything else is fluctuating in price discovery until hyperbitcoinization completes.

The Dollar is the real stable coin, thanks to its unbreakable peg to the dollar.

Awesome. You we're just making a joke, but for some reason that one simple statement had my brain looking at the dollar from a whole different perspective for a few seconds. "What is money, anyway????" Nice. It's like when you start to grapple with relativity... "What is time???"

Re: Tether Required Recapitalization in May 2022

#98

Post by hiq » Fri, May 20, 2022, 5:08 PM UTC

wyxuan wrote: post #75

Patrick is overindexing on the investments portion of the report – which is a little under 5% of backing. There are investment deals and crypto, but it's unknown if this represents the entirety of the amount fwiw. If we take a step back and look at the key takeaway from the audit report is that amount of commercial paper was reduced and amount of T-bills (essentially cash) was increased by 5 bil. Good news if you thi…

There is still no audit, only attestations.

Re: Tether Required Recapitalization in May 2022

#99

Post by Tao332 » Fri, May 20, 2022, 5:09 PM UTC

lupire wrote: post #68

meirelles wrote: post #55

silly question, being USDT "only" 80B, why does it matter if it collapses? considering cryptos market cap is more than 1T, and 100B's wipeouts routine, sometimes during crypto winters (where we observe -80% across the board) or collapses such as Luna recently (>50B? no idea) Of course, panic would happen, but still. I think people would move on, forget, and continue believing whatever they want to just curious to rea…

People need tether to avoid going all the way off chain when they sell.

Genuinely curious: why do people need that?

Re: Tether Required Recapitalization in May 2022

#100

Post by dereg » Fri, May 20, 2022, 5:10 PM UTC

jandrese wrote: post #73

gringoDan wrote: post #15

Earlier quoted context omitted.

Any stablecoin that is NOT backed 1-1 by fiat, correct? I.e., algorithmic stables. If you're 100% collateralized by USD in your bank account, how can it get de-pegged?

Are there any 1-1 fiat stablecoins that aren't just flat out lies? Like every new crypto coin minted requires a matching real dollar to be stashed away. My impression is that nobody does this because it would mean massive waits to buy the crypto coins when the real dollars run low and because the way to make real money is with leverage.

USDC.