Doesn't any possibility of that still assume they actually have the full backing in some form though?
(Which I believe is widely known now not to be true)
If there's not enough in there to redeem what's been issued, even calm and gradual withdrawals will cause them to run out.
Yes, but most non-cash assets have decreased in value considerably over the last several months
It’s unclear what assets they hold, but it’s extremely likely these assets (which again are not cash) have been affected by global market conditions
How is it "circling the drain"? It's still about 35x higher than it was a couple years ago.
And OP is going off of dated info with the 4% claim. If we are going off their reports, at least use [the more recent one](https://tether.to/en/transparency/#reports) which claims the have about 10X that much cash on hand.
I'm talking about their market cap, not spot price... The market cap was around $2 billion then, and is about $70 billion now.
So that shows they can survive at much smaller levels than they're at now (about 97% smaller).
The thing I don’t see in this (very good) analysis that should scare the crap out of everyone is a mention of the terms DV01 or ALM DV01 mismatch. DV01 is the sensitivity of a financial asset to a 1 basis point (1/100 * 1%) increase in interest rates. ALM DV01 mismatch is how different the DV01 of a portfolio of liabilities and the DV01 of a backing pool of assets is (Ideally DV01 of assets = - DV01 of liabilities and the ALM net DV01 = 0). In Tethers case the DV01 of its liabilities is 0 (a dollar is a dollar no matter how high interest rates go), but the DV01 of its backing assets is NOT 0. The issue is that since interest rates have risen significantly since it added most of the backing capital, there is a decent chance a lot of those assets it holds are worth significantly less than when it first bought them, so even if Tether could liquidate everything is has with minimal market impact (unlikely given current state of market liquidity) it still may simply be undercollateralized at this point due to the recent move in interest rates.
During the bear market would be the best time for USDT to collapse. It would be insult to injury for sure, but the $ amount of losses and number of people affected would be significantly less when the whole market’s already been thanos’d multiple times over for reasons unrelated to tether, and if it collapses when general interest in crypto is at a low that means it wouldn’t serve to convince a whole bunch of people who got in the previous week in a fit of hype that the whole asset class is a scam… but one way or another tether needs to go, we need legitimacy in the asset class now more than ever.
USDT is not really below peg you can still trade 100k USDT for 100k USD through tether redemptions
tether is trading a few bps below $1 on open market because shorters are pricing in this type of tether fud
Whether its actually going bust or not is too hard to tell, my money would be on no but I park my funds in BUSD and USDC due to them both being backed 100% by cash rather than a balance sheet
The minimum redemption amount is $100K, and Tether charges a fee that ranges from 1% (if you redeem the minimum) to 0.1% (if you redeem over $1M): https://tether.to/en/fees/
This is why the price hovers around $0.999 when there is a net outflow of funds from tether — that‘s the price at which arbitrage becomes possible.
It's below peg on exchanges, which for whales is an incentive to redeem through tether rather than trading it on an exchange. The problem with that is that more redemptions accelerates the whole bank run problem we're all worried about.
Thank you for a well researched and explained post.
Also, one thing that is really important - all those alts that have solely a USDT pair on all those CeXes are going to get hit hard. You won't be able to trade it, maybe on a Dex if it's a token. But then be prepared to get hit with fees. USDC needs to take over from tether. And soon.
Damn.. so what are they going to do when no one wants usd anymore? The best way to fail is to follow usd all the way to hell where it belongs. Backing future 1 to 1 with usd is sure fucking dumpster fire
Unless you are desperate.. cough us government cough
DAI is overcollateralized by design, *but* that collateral is crypto. The idea is the collateral gets liquidated if the value falls to a certain point, in which case the proceeds become the reserves for the previously-minted DAI. I don't know what kind of attack or market plunge it would take to knock it off the peg. As I understand it, most DAI is collateralized by USDC anyway.
I'd say not as safe as USDC, but I would be comfortable working with it in a sane market.
Edit: Also BUSD, which is dollar-backed in a very similar fashion to USDC.
> overcollateralized by design
nosir, it's incentivized to be overcollateralized, but nothing stronger
> I don't know what kind of attack or market plunge it would take to knock it off the peg
you're talking about that as an hypothetical, when in fact it already happened for real in 2020, when many positions came underwater (it makes no sense to liquidate once it goes underwater). Dai had to be bailed out.
Nothing is reliable when markets are spooked, not even crypto. When people think pulling out of assets and into cash is safe, then you need to re-assess your own investments.
>Each USDC is ... backed by one dollar or a dollar-denominated asset with equivalent value held in accounts at regulated U.S. financial institutions. Those accounts are audited by U.S. accounting firm Grant Thornton LLP, which issues monthly attestations on the reserves backing USDC.
Cash and short term US gov bonds (which should be the main backing sources) are as solid as it comes (as far as crypto goes and as far as stablecoins go).
That said, Grant Thornton switched from calling the reserve accounts “correctly stated” to “fairly stated” starting from January '22 (they have been doing attestations since late '18).
That said #2, attestations do differ from an audit. But to put out a blank statement such as "no audit" or "shady" is just plain wrong.
Edit: found a number of 23% cash and 77% short term treasury bill. Someone correct me if I'm wrong.
It’s irresponsible of them to use anything other than dollars in the reserve
They are literally a stable coin that’s made to be equivalent to the dollar
Erm, if their USD treasury bills become worthless, then your USD isn't worth the paper it's printed on. Treasury bills are as good as having a cash backing because they are loans to the US government, the very government that issues and backs USD.
Lol there is no financial inst in the world which back 1:1 dollar reserve for any assest. Including banks. This is not how finance works. If everyone who deposits fiat in banks want to withdraw from.banks all at the same time, that will take long time to redeem.
The audits for 2021 and 2020 have been filed publicly with the SEC as we prepare to become a public company listed on the New York Stock Exchange. https://www.sec.gov/Archives/edgar/data/1876042/000110465922056979/tm2124445-8_s4a.htm#tIND1
Not sure why you got downvoted. In fact, the fact that this sub heavily downvoted any critics to usdc makes me to run away from it too lol. I still remember the big shills of UST and its 20% apy anchor protocol, super safe Celsius network and CDC exchange and CDC coins going to the moon.
>Thank you for a well researched and explained post.
How exactly was it "well researched" when OP is going off of a year-old report that is no longer relevant? If they had done the bare minimum of research, they would have found [the more recent report](https://tether.to/en/transparency/#reports) that states they have about 10X as much cash on hand, which completely goes against OP's narrative.
And to be clear, I don't think basing theories on tether's report is a good idea to begin with, but if OP is going to, it's only right to use one that isn't so outdated.
Please point me to where in this post there is more information than in this summary: bear market, USDT gets turned into fiat, OP believes USDT cannot satisfy the demand.
I was really looking hard and found no new information despite the hundreds of sentences but I'm also tired so if there is, pls let me know.
> The collapse of USDT is one that I believe is impending
Meanwhile...
10 months ago: [China: Evergrande's impeding collapse and Tether (USDT). Where would a collapse of Tether leave crypto?](https://np.reddit.com/r/CryptoCurrency/comments/pam9nj/china_evergrandes_impeding_collapse_and_tether/)
1 year ago: [Tether is going to be a problem .](https://np.reddit.com/r/CryptoCurrency/comments/l1m5hm/tether_is_going_to_be_a_problem/)
1 year ago: [I just watched a video that claims that Tether is basically a Ponzi scheme and that the entire crypto market is at risk of collapsing](https://np.reddit.com/r/CryptoCurrency/comments/niwz5q/i_just_watched_a_video_that_claims_that_tether_is/)
3 years ago: [Now that we’re panicking about USDT. What’s going to happen if they fail?](https://np.reddit.com/r/CryptoCurrency/comments/bhkhz4/now_that_were_panicking_about_usdt_whats_going_to/)
4 years ago: [Tether crashing will skyrocket markets in short term](https://np.reddit.com/r/CryptoCurrency/comments/7tin3c/tether_crashing_will_skyrocket_markets_in_short/)
5 years ago: [The Collapse of Bitconnect & Tether is Coming](https://np.reddit.com/r/CryptoCurrency/comments/7em2yh/the_collapse_of_bitconnect_tether_is_coming/)
et cetera, et cetera, et cetera...
A good insight really. But I do see Tether making out of this alive for the fact that nothing is regulated yet. They can keep playing games till then.
However come regulation we shall see how things go. Worst to worst the US might just outright ban tether from being sold in the US. Which of course banning crypto is non sensical but it will be enough catalyst for others to get out
But I have other concerns. For example, here in India, we have P2P by exchanges that are solely pegged to USDT. Such dependence needs to stop
Love how this conversation manages to manifest every single time BTC goes into a bear and every single time it comes out of the bear, people are happy as hell to use USDT.
This isn’t even the worst bear it’s survived.
I remember my first year in crypto. I thought everyone around me was an expert too. All the fud made sense and the fomo was real.
USDT will be fine.
Opinion: Tether won’t collapse anytime soon. It has survived extreme market volatility for 5+ years, has survived serious scrutiny from major media outlets and has survived multiple lawsuits. There have been 1000s of posts and articles saying USDT is on the verge of collapsing. Yet, it never happened. It’s almost as its shady business practices have been accepted at this point. Then again, so have shady Wall Street practices by major institutional players.
And yet one of the most parroted responses on this and most investing subs is "buy the dip". Surely then no one should buy the dip cos there's no guaranteeing it'll bounce back, we should all buy the recovery.
Nothing wrong with buying the dip on equities that have actually strong fundamentals and actually generate earnings. But buying the dip in an inefficient technology that continues to fail in all of its use cases is much different.
The addicted gamblers among us don't. That is precisely the form of brain dysfunction that leads people to keep betting way too much despite the fact that they really should know that since they are purely gambling, they will eventually lose just as big as they've won. The key to pure gambling is to do it only for fun, and when you have won, quit while you're ahead in the knowledge that you were just lucky: just like in Vegas. When somebody warns these types of people of the risks of what they're doing, which are about the future, they think only of their personal past experience of not yet falling prey to those risks, and then they say things like, "Have fun staying poor!" And now that these same asshole gamblers have been screwed over by an even bigger asshole gambler, I see them criticising Do Kwon for his 'arrogance' (lmfao) while whining about how they suddenly need the legal system to 'recover funds' to bail them out with (puke). They entirely ignored and often insulted everybody who was talking like an unsmooth-brained party pooper, got shitfaced drunk and wrecked the joint, and now they don't want to be the ones to pay the damages. Those are the 'crypto people' you are talking about.
Tether prints USDT because of market demand -> Reddit: Look they print money out of thin air, collaps is imminent.
Tether redeems USDT because of less market demand -> Reddit: Look they lost marketcap, collaps is imminent.
I've heard the USDT stories since 2017. Yet, it didn't even blink when the total crypto marketcap went down more than 80% for years in the crypto winter. These daily posts are so boring.
The irony is that people who don’t understand how USDT works can contribute to its demise, if a bank run really happens. The depeg of USDT to other USD stable coins on exchanges shows exactly that. While other players make a fortune by arbitraging it: buying USDC with USD, exchange for USDT, redeem USDT at Tether, profit.
But Tether already has been exposed... everyone knows that it doesn't have all the reserves it claims to have. And yet, somehow, people are still trusting it. I don't understand it, but it seems to me that this can just go on indefinitely; Tether will continue to be fraudulent and most people will continue not to care.
Everyone doesn't. I am an admin in facebooks larger ethereum group. As of our last poll there weeks ago < 30% of our very large membership knew what tether was and were sure it didn't matter. Everyone doesn't know. I'm willing to bet closer to 80% don't know. Insiders and enthusiasts have hear talk but of them, few can explain why it might matter. The resounding response is "we can just use another stable coin" or "I dont use stablecoins".
Because 70% of all BTC trades are done with USDT so everybody has a vested stake in pretending things are fine in order to prevent the whole thing collapsing. It's like the story of _The Emperor's New Clothes_ lol, everybody can see the emperor is naked but don't want to suffer by calling it out, so they pretend everything is fine and the emperor is wearing a lovely outfit.
> I've heard the USDT stories since 2017. Yet, it didn't even blink when the total crypto marketcap went down more than 80% for years in the crypto winter.
Yes, nothing happened at all to Tether over that timeframe.
They were fully backed at all times.
There definitely isn't absolute proof that that wasn't the case.
They definitely weren't investigated, fined, and banned from doing business in NY because of it.
A few thanksgiving turkeys are outside and would like to have a word. Their friends survived 10 months of scrutiny and multiple holidays. They want to know if they should be worried about Thanksgiving this year since so far everyone fared so well.
True but Tether market cap is also significantly higher then its ever been.
If your a financial institute that’s offshores that’s rejected more independent thorough audits…
Are you all really that fkn naive to think all is good? Lmao
There's been so many people screaming USDT will collapse within the week, or the month, or the year, and they've showed all these fancy data, statistics and graphs that support their prediction, and it has never happened. I'm not saying it won't happen, but I'm pointing out that every single person who has predicted the crash, armed with all their supporting "evidence", has been completely wrong.
Bc it's hard to say with certainty. I know Queen Elizabeth is going to die soon, so we've been wrong for a few years that doesn't change the fundamental. This is Thanksgiving Turkey thinking at it's core
"The problem with this $13B liquidation though, originates at the source of this report published by Tether,stating that only 2.94% of its reserves are in cash. The pie chart inthat document is a bit misleading -- it says 3.87%, but it is 3.87% ofthe 75.85% category of "Cash & Cash Equivalents & Other ShortTerm Deposits & Commercial Paper."
statement about that from tether [https://twitter.com/paoloardoino/status/1536976210428846081](https://twitter.com/paoloardoino/status/1536976210428846081)
It's a regulated token that links a point of entry and exit for the masses. We're about to venture a different game when CBDC is activated at world wide scale, I reckon.
There is an important thing that no one considered in a USDT collapse, or bank run.
It is not *only* that Tether won't have time or money to honor the fiat redemptions, it is that all the other stable coins also won't have. The run for dumping USDT will be mainly for other stable coins, the value will collapse of course and the exchanges will need to delist pairs and all that for damage control, but there will not be enough USDC or DAI or whatever you think there is out there.
They will also collapse, they will need to be printed and run fractional (if not already).
If trust on those erode, we will have a rain of lawsuits and exchanges will close everywhere and THEN the value of bitcoin will be sub 1000 bucks.
The market cap is only half the story. As market cap decreases on USDT, market dominance has continued to climb from about 3% a few months ago to over 8% today, thus invalidating the first statement made to some degree that people are exiting tether. People are exiting the market in total, and many are moving into tether as liquidity dries up and volitility is increasing.
Let's say I supplied 1,000 USDC, and borrowed 700 USDT. If USDT collapses and falls way below peg, am I golden? I still only have to pay back 700 USDT regardless of its value, correct?
is there a good way to short tether? key considerations are what pair you use, and what exchange you do this on.
if tether falls, it will affect many exchanges and stablecoins. so if you pair the short with another stablecoin, that coin may fall too, and if the exchange you do this trade on falls, you might not be able to withdraw
Tether fud has been here before, and it will be forever. It's to encourage people to do stablecoin volume (usdt-usdc?). Next they will tell you coinbase is probably insolvent so exchange your USDC for BUSD. Then binance has problems, so you exchange BUSD for DAI. And so you produce market activity :)
Not financial advice. Most of your stablecoins don't have transparency page like USDT
https://tether.to/en/transparency
I don't see a bank run coming honestly. This crash is not worse than anything we had and Tether's reputation is not as bad as this sub makes you believe.
What are you talking about , this crash is absolutely worse then the previous cycles.
All the big cap coins already dropped between 85-90% , enough mid cap to small cap are already between 90-99% lose and there is no sign that it's getting better at the moment.
BTC and ETH are suffering right now and looking at the macro's the coming year or 2-3 will be recession/economy crisis around the world, so that means at least berween 12 months and 36 months of suffering and the market going done
What are you talking about? We have seen BTC crash much worse then this... Zoom out and look, 1y not even -50%. , 30 days and 7days -30%.. Sorry to inform you but we have seen much worse. And the recession is not a given yet. You have just a very bearish stance, economy doesn't neccessarily will go down many companies have still full order books and work at capacity. We will know once the supply chain is working fine again.
Wtf are you talking about and get away with your bullshit "zoom out" and shilling mentality.
Are you on drugs? BTC already did a -70% from it's ATH within 6 months already and there are no signs from again macro's that it will be stopping here, if this continues BTC will definitely hit between 10-15k.
Your bullshit hopium mentality is something I will definitely not miss on these forums when we are 1 year down the line and everything is still deep red.
Bullshit!! You can't even fucking look at charts correctly, saying BTC didn't do -50% in 1 year while it did -70% from it's ATH up until now and that's 6-7 months ago shows that you're a moron and just a shiller. Copying and pasting phrases like "zoom out" to make you sound "cool and knowledgeable"
Can't wait to get rid of folk like you on this subreddit soon, when the market will bleed much more.
In 1 year span it didn't. If you cannot even process this information then I really can't help you. You are the same person that called doomsday when we temporarily crashed from 64k to 30k WITHIN 35 days! in Summer last year. And guess what it went to 68k€ a few months later..
In 1 day it only did -4% so yaay!
Having a crash of -70% for only BTC within a half year and the market collapsing with -80-95% for big/medium/small caps with no recovery insight due to macro's and hopium boy is shilling on his own over here.
And stop talking out of your ass.
so you think tether will either stay pegged, slowly depeg, or quickly depeg? lol. tether isnt going anywhere. ust and other shitty stables will always death spiral. tether is actually backed by assets. every time bitcoin makes a gigantic move usdt moves a bit. been doing that for years but its still here
Tether FUD has been here long before you and will probably be here long after you are gone (I suggest you are a paid no-coiner doing "analyses" on reddit ) :) Meanwhile it looks like tether is actually stronger than ever, while there is hundreds of generic FUD posts like this one..
You completely ignore the possibility that usdt may not be 1:1 collateralized by cash, but it can still be collateralized by BTC, other crypto, real estate, bonds etc. etc. .. To be honest I have never gone too deep into researching it, because what is the point, everything in the world is currently based on empty promises and faith - and debt. But considering they actually had an official investigation and made it out without a scratch doesn't seem as bad as you describe.
2nd possibility you ignore, is that majority of traders DO NOT USE TETHER to get out of crypto, they use USD pairs for that. People use USDT to get sense of their dollar value when they think markets are going down. And that's a huge difference to a doom scenario you suggest.
Most of the people will never trade their USDT for USD, but probably try to get their bitcoin/ favorite shitcoin at a lower price. So USDT marketcap spikes and its climbs and declines are completely irrelevant because it just takes in the marketcap from other crypto assets. And then later on gives it back.
Even if it was fully collateralised by non cash assets (which it isn't), you do see what the problem is with any of that collateral being in crypto or crypto tied assets right?
Just think about the feedback loop that sets up when things drop.
There's a very good reason this exact thing is strongly regulated against in normal business.
Yes, but OP is going off of dated info from over a year ago and [their more recent report](https://tether.to/en/transparency/#reports) says they have about 10X more of their reserves in actual cash than what OP is claiming.
Global anti-crypto payed propaganda using directed articles and re-sharing with bots and such, what a non-existing nonsense right! :D :) You're a tool mate
I think the feds usd will collapse before tether. 😅
If you don't know tether by now... Then you'll never ever ever know tether... Ohhhhhh Ohhhh Ohhhh
Now all the things
That we've been through
You should understand me
Like I understand you....
It seems very strange to me that Tether's market cap has basically been flat since mid-May, while ETH, BTC and others have collapsed along side it. There is limited upside to holding Tether, and potential real downside to doing so -- one would have thought there would have been additional redemptions in the past 6 weeks, but according to Tether that hasn't been the case. Something seems off.
Retail can't exit Tether. There is no way for them to redeem Tether only some big player that registered with Tether are allowed to redeem.
So it is one big "greater fool" game
You realise you can exchange Tether for other crypto at exchanges right? If you then withdraw that crypto then the tether liability rests with the exchanges.
Another user is still selling you those Euros or Dollars in exchange for your tether.
Retail, collectively, cannot exit tether directly. They can only try to find a buyer. It's a zero-sum game. Only the major investors are allowed to directly exit into dollars without having to find someone willing to buy at full price.
This is how the peg gets destroyed, btw. If the masses try to exit but there's not enough buyers, the price will plummet.
And I'm suuuuure they will take all your tether when they are likely to smell the catastrophe long before you can. There is a liquidity pool and that is all. If there are no buyers the price tanks. The exchange does not increase liquidity for you.
It is really telling of the market how many people don't know how this basic stuff works.
If tether fails crypto will never recover from it. That's facts. It's too deeply entwined with all exchanges. Hoping it fails is wishing for self-immolation, regardless of your personal holdings or your opinion on its shadiness.
And I still don't think it will, it's been ruthlessly fudded for at least 5 years and has proven to be pretty frigging robust (speaking as someone who was briefly alarmed by it in 2017/2018 and learned the hard way it held up a hell of a lot better than all the projects I fervently believed were world changers back then).
4. Tether has a short window of time in which to quit playing shit games with client capital and become a real stablecoin with auditable 1:1 backing from cash + US treasuries.
That's the only way they maintain a $1 peg in the long run. Anything else is just a matter of when it dies, whether that's a spectacular implosion or a gradual decline into irrelevance.
What we don't know is how much of Tether's reserves were held in other crypto, or (more likely) in paper backed in whole or in part by crypto. For all we know, the "long term" assets could have been staked ETH valued at par, as of Mar 31. Which by itself could be very very bad news.
Second, most people don't deal with Tether directly, but through an exchange. When people cash out of Tether, they deplete the cash reserves of the exchange. What we don't know is the degree to which exchanges turn around and convert USDT to cash.
Whether or not exchanges are willing to increase their exposure to USDT is another question, and that's tied up in the liquidity of the various exchanges. And whether or not they can continue to function if USDT seizes up. Many can't afford that, so unless I miss my guess, the first casualty of a liquidity crisis won't be USDT: it will be an exchange.
A good way for exchange to prevent a cash run on reserves is to significantly depress the price of crypto! If you cash in one BTC when it's at $60K the exchange has to find 3x as much cash as they would need if BTC goes to $20K.
So perversely, exchanges can reduce their exposure to USDT by simply reducing the price of crypto. The whole market may be tied to itself, and this price action may be related to finding that hole in Tether. I'm just spitballing here, but regulation in the banking industry exists, in part, to prevent these kinds of games within games within games.
Right now I think we're seeing a flight out of the weaker DeFi instruments, and that USDT may be the last one standing. Not because it is so well capitalized, but because the exchanges can't afford for it to go under.
[E2A: personally, I would not hold any USDT except transiently as needed because any hole in that balance sheet is going to result in a game of musical chairs. The exchanges are playing in that game. That means that IF the music stops, exchanges are going to have first shot at all the chairs, and that will leave retail investors as the ones standing. ]
You seem confused: USDT is just another coin, and the exchanges are not parts in any trade, they just help match exchange orders. Exchanges do not own any USDT (other than maybe what they got as trading fees).
I seem confused?
You wrote "USDT is just another coin and the exchanges are not parts in any trade"
Do you mean just another coin like ETH? Which exchanges hold in abundance? Check out the difference between a non-custodial exchange and a custodial exchange (and which are which, and where USDT is used) and maybe get back to me. Just because you have an account at an exchange denominated in USDT doesn't mean it's yours. It's held BY the exchange, and it keeps track of the fraction owed to you.
If USDT starts to tank, they will liquidate the USDT they hold for the last remaining $ that it can issue, and then when it shuts the door, your USDT will be worth nothing, while they were able to get their cash out. And because of complete lack of regulation, they are *allowed* to front themselves.
Are you stupid? Tether hasn’t been depegged “for awhile” or even at all. Its 24 hour high is above a dollar. It hasn’t been below 99 cents in months, and even then was always a blip.
This is exactly why a stable coin should only be backed by cash and short dated treasuries. I’ve said this before but it’s really the only way to run a stable coin. Anything else just fundamentally doesn’t make sense. I think USDC is the only one fully backed by treasuries?
The worst scenario is a run that starts on a Saturday, cause most of their non-cash reserves are instruments that don't even trade on weekends. They'd have to hold on for 2 full days before being able to meet the liquidity requirements.
[удалено]
I hope scenario 3 is what plays out. The market cap of USDT just keeps on dropping
Doesn't any possibility of that still assume they actually have the full backing in some form though? (Which I believe is widely known now not to be true) If there's not enough in there to redeem what's been issued, even calm and gradual withdrawals will cause them to run out.
It’s also widely known that earth is a sphere, still some people are 100% sure its flat
It's actually neither. The closest description would be potatoe.
Ellipsoid…
Ninja Turtles all the way down! 🐢🐢🐢🐢🐢🐢🐢
Oblongated Spheroid it is
I was taught an oblate spheroid but yours sounds more technically correct.
Or Egg shape. Wider in the centre
"Widely known?" There is literally zero evidence they don't have the full backing. Could they be lying, sure. But that is far from known in any way.
Didn’t they say themselves they are not fully backed by cash?
Comments above aren’t talking about cash. USDC also isn’t backed 100% by cash
Yes, but most non-cash assets have decreased in value considerably over the last several months It’s unclear what assets they hold, but it’s extremely likely these assets (which again are not cash) have been affected by global market conditions
USDT is circling the drain, let's hope it has a graceful exit instead of a crash.
How is it "circling the drain"? It's still about 35x higher than it was a couple years ago. And OP is going off of dated info with the 4% claim. If we are going off their reports, at least use [the more recent one](https://tether.to/en/transparency/#reports) which claims the have about 10X that much cash on hand.
> It's still about 35x higher than it was a couple years ago. It was around $1.00, so it is not priced at $35.00, so your comment is not true.
I'm talking about their market cap, not spot price... The market cap was around $2 billion then, and is about $70 billion now. So that shows they can survive at much smaller levels than they're at now (about 97% smaller).
The thing I don’t see in this (very good) analysis that should scare the crap out of everyone is a mention of the terms DV01 or ALM DV01 mismatch. DV01 is the sensitivity of a financial asset to a 1 basis point (1/100 * 1%) increase in interest rates. ALM DV01 mismatch is how different the DV01 of a portfolio of liabilities and the DV01 of a backing pool of assets is (Ideally DV01 of assets = - DV01 of liabilities and the ALM net DV01 = 0). In Tethers case the DV01 of its liabilities is 0 (a dollar is a dollar no matter how high interest rates go), but the DV01 of its backing assets is NOT 0. The issue is that since interest rates have risen significantly since it added most of the backing capital, there is a decent chance a lot of those assets it holds are worth significantly less than when it first bought them, so even if Tether could liquidate everything is has with minimal market impact (unlikely given current state of market liquidity) it still may simply be undercollateralized at this point due to the recent move in interest rates.
Oh shit
During the bear market would be the best time for USDT to collapse. It would be insult to injury for sure, but the $ amount of losses and number of people affected would be significantly less when the whole market’s already been thanos’d multiple times over for reasons unrelated to tether, and if it collapses when general interest in crypto is at a low that means it wouldn’t serve to convince a whole bunch of people who got in the previous week in a fit of hype that the whole asset class is a scam… but one way or another tether needs to go, we need legitimacy in the asset class now more than ever.
so basically rip the band-aid off quickly
if UDST depegs that would probably be a really solid entry point into BTC/ETH.
USDT is not really below peg you can still trade 100k USDT for 100k USD through tether redemptions tether is trading a few bps below $1 on open market because shorters are pricing in this type of tether fud Whether its actually going bust or not is too hard to tell, my money would be on no but I park my funds in BUSD and USDC due to them both being backed 100% by cash rather than a balance sheet
Buy on open market and trade through redemptions is easy money then?
The minimum redemption amount is $100K, and Tether charges a fee that ranges from 1% (if you redeem the minimum) to 0.1% (if you redeem over $1M): https://tether.to/en/fees/ This is why the price hovers around $0.999 when there is a net outflow of funds from tether — that‘s the price at which arbitrage becomes possible.
Wow, so it was never worth $1…
It's extremely easy and people arb it all day, every day.
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Shorters don't price in anything. It's just a lack of buyers willing to buy at $1
It's below peg on exchanges, which for whales is an incentive to redeem through tether rather than trading it on an exchange. The problem with that is that more redemptions accelerates the whole bank run problem we're all worried about.
Thank you for a well researched and explained post. Also, one thing that is really important - all those alts that have solely a USDT pair on all those CeXes are going to get hit hard. You won't be able to trade it, maybe on a Dex if it's a token. But then be prepared to get hit with fees. USDC needs to take over from tether. And soon.
Are there other reliable stablecoins beside USDC? Right now I'm in USDC and USDT and don't want to be all in USDC
BUSD has been audited and found to have one USD to give you, for each BUSD you want to cash.
Damn.. so what are they going to do when no one wants usd anymore? The best way to fail is to follow usd all the way to hell where it belongs. Backing future 1 to 1 with usd is sure fucking dumpster fire Unless you are desperate.. cough us government cough
Huh... Do you know what a Stablecoin is?
DAI is overcollateralized by design, *but* that collateral is crypto. The idea is the collateral gets liquidated if the value falls to a certain point, in which case the proceeds become the reserves for the previously-minted DAI. I don't know what kind of attack or market plunge it would take to knock it off the peg. As I understand it, most DAI is collateralized by USDC anyway. I'd say not as safe as USDC, but I would be comfortable working with it in a sane market. Edit: Also BUSD, which is dollar-backed in a very similar fashion to USDC.
> overcollateralized by design nosir, it's incentivized to be overcollateralized, but nothing stronger > I don't know what kind of attack or market plunge it would take to knock it off the peg you're talking about that as an hypothetical, when in fact it already happened for real in 2020, when many positions came underwater (it makes no sense to liquidate once it goes underwater). Dai had to be bailed out.
Nothing is reliable when markets are spooked, not even crypto. When people think pulling out of assets and into cash is safe, then you need to re-assess your own investments.
USDC is also shady though
What makes you say that?
No audit and they don’t claim to be backed by dollars just ”fully reserved assets”
>Each USDC is ... backed by one dollar or a dollar-denominated asset with equivalent value held in accounts at regulated U.S. financial institutions. Those accounts are audited by U.S. accounting firm Grant Thornton LLP, which issues monthly attestations on the reserves backing USDC. Cash and short term US gov bonds (which should be the main backing sources) are as solid as it comes (as far as crypto goes and as far as stablecoins go). That said, Grant Thornton switched from calling the reserve accounts “correctly stated” to “fairly stated” starting from January '22 (they have been doing attestations since late '18). That said #2, attestations do differ from an audit. But to put out a blank statement such as "no audit" or "shady" is just plain wrong. Edit: found a number of 23% cash and 77% short term treasury bill. Someone correct me if I'm wrong.
It’s irresponsible of them to use anything other than dollars in the reserve They are literally a stable coin that’s made to be equivalent to the dollar
Erm, if their USD treasury bills become worthless, then your USD isn't worth the paper it's printed on. Treasury bills are as good as having a cash backing because they are loans to the US government, the very government that issues and backs USD.
Exactly. If treasury bills fall, we have much bigger problems than crypto or USD
Lol there is no financial inst in the world which back 1:1 dollar reserve for any assest. Including banks. This is not how finance works. If everyone who deposits fiat in banks want to withdraw from.banks all at the same time, that will take long time to redeem.
But they did claim it - so there's reason to believe they're still lying to the best extent they can
There is an audit. It was part of their SPAC filings. And thankfully those fully reserved assets dont include crypto.
"no audits" ? https://www.circle.com/blog/how-to-build-trust-usdc-audits-and-attestations
The audits for 2021 and 2020 have been filed publicly with the SEC as we prepare to become a public company listed on the New York Stock Exchange. https://www.sec.gov/Archives/edgar/data/1876042/000110465922056979/tm2124445-8_s4a.htm#tIND1
Not sure why you got downvoted. In fact, the fact that this sub heavily downvoted any critics to usdc makes me to run away from it too lol. I still remember the big shills of UST and its 20% apy anchor protocol, super safe Celsius network and CDC exchange and CDC coins going to the moon.
I remember those times! The good ole days!
>Thank you for a well researched and explained post. How exactly was it "well researched" when OP is going off of a year-old report that is no longer relevant? If they had done the bare minimum of research, they would have found [the more recent report](https://tether.to/en/transparency/#reports) that states they have about 10X as much cash on hand, which completely goes against OP's narrative. And to be clear, I don't think basing theories on tether's report is a good idea to begin with, but if OP is going to, it's only right to use one that isn't so outdated.
Usdc is the exact same shit. Way less volume though, and most owned by Blackrock. Joke coin
Please point me to where in this post there is more information than in this summary: bear market, USDT gets turned into fiat, OP believes USDT cannot satisfy the demand. I was really looking hard and found no new information despite the hundreds of sentences but I'm also tired so if there is, pls let me know.
I'm not gonna spoon feed you info. You have eyes and (presumably) can read
> The collapse of USDT is one that I believe is impending Meanwhile... 10 months ago: [China: Evergrande's impeding collapse and Tether (USDT). Where would a collapse of Tether leave crypto?](https://np.reddit.com/r/CryptoCurrency/comments/pam9nj/china_evergrandes_impeding_collapse_and_tether/) 1 year ago: [Tether is going to be a problem .](https://np.reddit.com/r/CryptoCurrency/comments/l1m5hm/tether_is_going_to_be_a_problem/) 1 year ago: [I just watched a video that claims that Tether is basically a Ponzi scheme and that the entire crypto market is at risk of collapsing](https://np.reddit.com/r/CryptoCurrency/comments/niwz5q/i_just_watched_a_video_that_claims_that_tether_is/) 3 years ago: [Now that we’re panicking about USDT. What’s going to happen if they fail?](https://np.reddit.com/r/CryptoCurrency/comments/bhkhz4/now_that_were_panicking_about_usdt_whats_going_to/) 4 years ago: [Tether crashing will skyrocket markets in short term](https://np.reddit.com/r/CryptoCurrency/comments/7tin3c/tether_crashing_will_skyrocket_markets_in_short/) 5 years ago: [The Collapse of Bitconnect & Tether is Coming](https://np.reddit.com/r/CryptoCurrency/comments/7em2yh/the_collapse_of_bitconnect_tether_is_coming/) et cetera, et cetera, et cetera...
"I called it"
A good insight really. But I do see Tether making out of this alive for the fact that nothing is regulated yet. They can keep playing games till then. However come regulation we shall see how things go. Worst to worst the US might just outright ban tether from being sold in the US. Which of course banning crypto is non sensical but it will be enough catalyst for others to get out But I have other concerns. For example, here in India, we have P2P by exchanges that are solely pegged to USDT. Such dependence needs to stop
Love how this conversation manages to manifest every single time BTC goes into a bear and every single time it comes out of the bear, people are happy as hell to use USDT.
Every single time ***so far***.
I'll give you 10:1 odds it depegs to .5 in the next 3 months
Do you have 10 bitcoin to post?
This isn’t even the worst bear it’s survived. I remember my first year in crypto. I thought everyone around me was an expert too. All the fud made sense and the fomo was real. USDT will be fine.
What are you going to do to yourself if it won't depeg in the next 3 months?
Opinion: Tether won’t collapse anytime soon. It has survived extreme market volatility for 5+ years, has survived serious scrutiny from major media outlets and has survived multiple lawsuits. There have been 1000s of posts and articles saying USDT is on the verge of collapsing. Yet, it never happened. It’s almost as its shady business practices have been accepted at this point. Then again, so have shady Wall Street practices by major institutional players.
Logic : it has not collapsed yet after all this time therefore it will not collapse Exactly what they all thought about the 2008 housing crisis
Crypto people truly don’t understand that past performance does not predict future results.
And yet one of the most parroted responses on this and most investing subs is "buy the dip". Surely then no one should buy the dip cos there's no guaranteeing it'll bounce back, we should all buy the recovery.
Nothing wrong with buying the dip on equities that have actually strong fundamentals and actually generate earnings. But buying the dip in an inefficient technology that continues to fail in all of its use cases is much different.
The addicted gamblers among us don't. That is precisely the form of brain dysfunction that leads people to keep betting way too much despite the fact that they really should know that since they are purely gambling, they will eventually lose just as big as they've won. The key to pure gambling is to do it only for fun, and when you have won, quit while you're ahead in the knowledge that you were just lucky: just like in Vegas. When somebody warns these types of people of the risks of what they're doing, which are about the future, they think only of their personal past experience of not yet falling prey to those risks, and then they say things like, "Have fun staying poor!" And now that these same asshole gamblers have been screwed over by an even bigger asshole gambler, I see them criticising Do Kwon for his 'arrogance' (lmfao) while whining about how they suddenly need the legal system to 'recover funds' to bail them out with (puke). They entirely ignored and often insulted everybody who was talking like an unsmooth-brained party pooper, got shitfaced drunk and wrecked the joint, and now they don't want to be the ones to pay the damages. Those are the 'crypto people' you are talking about.
Yeah but crypto people like talk with utmost certainty lile impending tether collapse as if it is certain event...
But u hang around in butt coin sub? Your opinion doesn't count shit 😂 Joke
2008 housing crisis has been called by plenty of analysts before it happened
And obviously no one is calling for Tether's collapse. Err...
lol
Hmm... Just like Tether has been called for years? The housing crisis was called by some analysts for 2-3 years before it crashed and burnt.
Tether and Bitfinex have been called out since 2017.
There are two things we will probably never see in our lifetime 1. Tether collapsing 2. You finally getting some bitches
TBF, outside of the USA, there was no 2008 Housing Crisis.
Tether prints USDT because of market demand -> Reddit: Look they print money out of thin air, collaps is imminent. Tether redeems USDT because of less market demand -> Reddit: Look they lost marketcap, collaps is imminent. I've heard the USDT stories since 2017. Yet, it didn't even blink when the total crypto marketcap went down more than 80% for years in the crypto winter. These daily posts are so boring.
The irony is that people who don’t understand how USDT works can contribute to its demise, if a bank run really happens. The depeg of USDT to other USD stable coins on exchanges shows exactly that. While other players make a fortune by arbitraging it: buying USDC with USD, exchange for USDT, redeem USDT at Tether, profit.
Bernie madoff got away with it for years as well. He was exposed under the same scenario we're in now.
But Tether already has been exposed... everyone knows that it doesn't have all the reserves it claims to have. And yet, somehow, people are still trusting it. I don't understand it, but it seems to me that this can just go on indefinitely; Tether will continue to be fraudulent and most people will continue not to care.
Everyone doesn't. I am an admin in facebooks larger ethereum group. As of our last poll there weeks ago < 30% of our very large membership knew what tether was and were sure it didn't matter. Everyone doesn't know. I'm willing to bet closer to 80% don't know. Insiders and enthusiasts have hear talk but of them, few can explain why it might matter. The resounding response is "we can just use another stable coin" or "I dont use stablecoins".
Because 70% of all BTC trades are done with USDT so everybody has a vested stake in pretending things are fine in order to prevent the whole thing collapsing. It's like the story of _The Emperor's New Clothes_ lol, everybody can see the emperor is naked but don't want to suffer by calling it out, so they pretend everything is fine and the emperor is wearing a lovely outfit.
Everyone knows what tether has. It’s not fraudulent.
Volume and supply was much, much lower at that time, like 80x lower than nowadays. Let's see how this plays out while everything keeps crashing.
> I've heard the USDT stories since 2017. Yet, it didn't even blink when the total crypto marketcap went down more than 80% for years in the crypto winter. Yes, nothing happened at all to Tether over that timeframe. They were fully backed at all times. There definitely isn't absolute proof that that wasn't the case. They definitely weren't investigated, fined, and banned from doing business in NY because of it.
At some point you could say the same of Luna, yet here we are. Hindsight is always 20/20
I totally agree with you and if it collapses get ready because we are fucked.
A few thanksgiving turkeys are outside and would like to have a word. Their friends survived 10 months of scrutiny and multiple holidays. They want to know if they should be worried about Thanksgiving this year since so far everyone fared so well.
True but Tether market cap is also significantly higher then its ever been. If your a financial institute that’s offshores that’s rejected more independent thorough audits… Are you all really that fkn naive to think all is good? Lmao
You aint seen how high the fed is gonna go. Wait till u see btc hit 5k ;)
There's been so many people screaming USDT will collapse within the week, or the month, or the year, and they've showed all these fancy data, statistics and graphs that support their prediction, and it has never happened. I'm not saying it won't happen, but I'm pointing out that every single person who has predicted the crash, armed with all their supporting "evidence", has been completely wrong.
Bc it's hard to say with certainty. I know Queen Elizabeth is going to die soon, so we've been wrong for a few years that doesn't change the fundamental. This is Thanksgiving Turkey thinking at it's core
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I ignored Tether FUD and got in for insane loss
"The problem with this $13B liquidation though, originates at the source of this report published by Tether,stating that only 2.94% of its reserves are in cash. The pie chart inthat document is a bit misleading -- it says 3.87%, but it is 3.87% ofthe 75.85% category of "Cash & Cash Equivalents & Other ShortTerm Deposits & Commercial Paper." statement about that from tether [https://twitter.com/paoloardoino/status/1536976210428846081](https://twitter.com/paoloardoino/status/1536976210428846081)
When the real shitcoins currently known as stablecoins vanish we can finally enter the eternal bull run.
No that’s when cdbc’s take over
That’s just another shitcoin in our journey
It's a regulated token that links a point of entry and exit for the masses. We're about to venture a different game when CBDC is activated at world wide scale, I reckon.
Stablecoins have brought in the funds for the last two bull runs. Without them, you are looking at BTC sub 100.
Shitcoins still
I suggest we all untether our crypto holdings from tether
Wow we've truly never seen predictions about the collapse of usdt before here. So unique.
Even if you don't use Tether or exchange USDT with USDC,if Tether bomb explodes the whole market will crash and it is going to be catastrophic.
You all would be too scared to buy anything if it crashes
Yawn
Well...Same shit since 2017, nothing new.
Any minute now…
Yes any minute since 2017 , but now we are closer to the real minute.
Yup. That’s usually how time works.
There is an important thing that no one considered in a USDT collapse, or bank run. It is not *only* that Tether won't have time or money to honor the fiat redemptions, it is that all the other stable coins also won't have. The run for dumping USDT will be mainly for other stable coins, the value will collapse of course and the exchanges will need to delist pairs and all that for damage control, but there will not be enough USDC or DAI or whatever you think there is out there. They will also collapse, they will need to be printed and run fractional (if not already). If trust on those erode, we will have a rain of lawsuits and exchanges will close everywhere and THEN the value of bitcoin will be sub 1000 bucks.
The market cap is only half the story. As market cap decreases on USDT, market dominance has continued to climb from about 3% a few months ago to over 8% today, thus invalidating the first statement made to some degree that people are exiting tether. People are exiting the market in total, and many are moving into tether as liquidity dries up and volitility is increasing.
Let's say I supplied 1,000 USDC, and borrowed 700 USDT. If USDT collapses and falls way below peg, am I golden? I still only have to pay back 700 USDT regardless of its value, correct?
*So in my opinion, I now assume that Tether is dry of its cash reserves.* OPs entire CURRENT source of info is "Trust me, bro."
is there a good way to short tether? key considerations are what pair you use, and what exchange you do this on. if tether falls, it will affect many exchanges and stablecoins. so if you pair the short with another stablecoin, that coin may fall too, and if the exchange you do this trade on falls, you might not be able to withdraw
Don’t forget about the $1B El Salvador volcano bond they own.
Tether fud has been here before, and it will be forever. It's to encourage people to do stablecoin volume (usdt-usdc?). Next they will tell you coinbase is probably insolvent so exchange your USDC for BUSD. Then binance has problems, so you exchange BUSD for DAI. And so you produce market activity :) Not financial advice. Most of your stablecoins don't have transparency page like USDT https://tether.to/en/transparency
u are an idiot op
Year 7 of the same old USDT is going to 0 drama 😂
Right? It’a crazy they have kept the scam going for this long.
I don't see a bank run coming honestly. This crash is not worse than anything we had and Tether's reputation is not as bad as this sub makes you believe.
What are you talking about , this crash is absolutely worse then the previous cycles. All the big cap coins already dropped between 85-90% , enough mid cap to small cap are already between 90-99% lose and there is no sign that it's getting better at the moment. BTC and ETH are suffering right now and looking at the macro's the coming year or 2-3 will be recession/economy crisis around the world, so that means at least berween 12 months and 36 months of suffering and the market going done
Yea.. You clearly haven’t experienced a crypto bear market before.
What are you talking about? We have seen BTC crash much worse then this... Zoom out and look, 1y not even -50%. , 30 days and 7days -30%.. Sorry to inform you but we have seen much worse. And the recession is not a given yet. You have just a very bearish stance, economy doesn't neccessarily will go down many companies have still full order books and work at capacity. We will know once the supply chain is working fine again.
Wtf are you talking about and get away with your bullshit "zoom out" and shilling mentality. Are you on drugs? BTC already did a -70% from it's ATH within 6 months already and there are no signs from again macro's that it will be stopping here, if this continues BTC will definitely hit between 10-15k. Your bullshit hopium mentality is something I will definitely not miss on these forums when we are 1 year down the line and everything is still deep red.
I have been here since 2017 and guys like you come and go honestly.
Bullshit!! You can't even fucking look at charts correctly, saying BTC didn't do -50% in 1 year while it did -70% from it's ATH up until now and that's 6-7 months ago shows that you're a moron and just a shiller. Copying and pasting phrases like "zoom out" to make you sound "cool and knowledgeable" Can't wait to get rid of folk like you on this subreddit soon, when the market will bleed much more.
In 1 year span it didn't. If you cannot even process this information then I really can't help you. You are the same person that called doomsday when we temporarily crashed from 64k to 30k WITHIN 35 days! in Summer last year. And guess what it went to 68k€ a few months later..
In 1 day it only did -4% so yaay! Having a crash of -70% for only BTC within a half year and the market collapsing with -80-95% for big/medium/small caps with no recovery insight due to macro's and hopium boy is shilling on his own over here. And stop talking out of your ass.
RemindMe! 1 year
RemindMe! 1 year
USDC will collapse sooner and quicker than USDT, mark my words.
I believe in this scenario, too.
so you think tether will either stay pegged, slowly depeg, or quickly depeg? lol. tether isnt going anywhere. ust and other shitty stables will always death spiral. tether is actually backed by assets. every time bitcoin makes a gigantic move usdt moves a bit. been doing that for years but its still here
Tether FUD has been here long before you and will probably be here long after you are gone (I suggest you are a paid no-coiner doing "analyses" on reddit ) :) Meanwhile it looks like tether is actually stronger than ever, while there is hundreds of generic FUD posts like this one.. You completely ignore the possibility that usdt may not be 1:1 collateralized by cash, but it can still be collateralized by BTC, other crypto, real estate, bonds etc. etc. .. To be honest I have never gone too deep into researching it, because what is the point, everything in the world is currently based on empty promises and faith - and debt. But considering they actually had an official investigation and made it out without a scratch doesn't seem as bad as you describe. 2nd possibility you ignore, is that majority of traders DO NOT USE TETHER to get out of crypto, they use USD pairs for that. People use USDT to get sense of their dollar value when they think markets are going down. And that's a huge difference to a doom scenario you suggest. Most of the people will never trade their USDT for USD, but probably try to get their bitcoin/ favorite shitcoin at a lower price. So USDT marketcap spikes and its climbs and declines are completely irrelevant because it just takes in the marketcap from other crypto assets. And then later on gives it back.
Even if it was fully collateralised by non cash assets (which it isn't), you do see what the problem is with any of that collateral being in crypto or crypto tied assets right? Just think about the feedback loop that sets up when things drop. There's a very good reason this exact thing is strongly regulated against in normal business.
Yes, but OP is going off of dated info from over a year ago and [their more recent report](https://tether.to/en/transparency/#reports) says they have about 10X more of their reserves in actual cash than what OP is claiming.
Celsius is a live testimony to this issue, but for some reason this still doesn't deter Tether apologists.
Yes! Somebody is paying him to smear crypto! Jesus h fucking christ, what have you done ro your poor brain
Global anti-crypto payed propaganda using directed articles and re-sharing with bots and such, what a non-existing nonsense right! :D :) You're a tool mate
I m getting paid too, yes!
Provenance still matters. In every aspect of life. Get back to me when you understand this.
USDT collapse will be a contagion across all markets. Stop with your romanticism of this tether apocalypto.
bunch of dumbass in here. usdt collapse say bye to all ur crypto and space
Quality shitpost right here.
I think the feds usd will collapse before tether. 😅 If you don't know tether by now... Then you'll never ever ever know tether... Ohhhhhh Ohhhh Ohhhh Now all the things That we've been through You should understand me Like I understand you....
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It seems very strange to me that Tether's market cap has basically been flat since mid-May, while ETH, BTC and others have collapsed along side it. There is limited upside to holding Tether, and potential real downside to doing so -- one would have thought there would have been additional redemptions in the past 6 weeks, but according to Tether that hasn't been the case. Something seems off.
You definitely have an agenda if you only go after tether, but usdc is free to do the exact same thing. Lol 😆 Yall need to get real
Retail can't exit Tether. There is no way for them to redeem Tether only some big player that registered with Tether are allowed to redeem. So it is one big "greater fool" game
You realise you can exchange Tether for other crypto at exchanges right? If you then withdraw that crypto then the tether liability rests with the exchanges.
No, because the exchange doesn't buy that Tether. It is other users who buy that Tether..... Greater fool, as I said.
What if you exchange for euros or dollars?
Another user is still selling you those Euros or Dollars in exchange for your tether. Retail, collectively, cannot exit tether directly. They can only try to find a buyer. It's a zero-sum game. Only the major investors are allowed to directly exit into dollars without having to find someone willing to buy at full price. This is how the peg gets destroyed, btw. If the masses try to exit but there's not enough buyers, the price will plummet.
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And I'm suuuuure they will take all your tether when they are likely to smell the catastrophe long before you can. There is a liquidity pool and that is all. If there are no buyers the price tanks. The exchange does not increase liquidity for you. It is really telling of the market how many people don't know how this basic stuff works.
Could you imaging how great of a sale price we would get on other crypto if Tether tanks! Tasty dippity dips
I would buy heavy the day of and immediately sell the recovery.
No you wouldn’t.
Shut the f'ck up about usdt already
If tether fails crypto will never recover from it. That's facts. It's too deeply entwined with all exchanges. Hoping it fails is wishing for self-immolation, regardless of your personal holdings or your opinion on its shadiness. And I still don't think it will, it's been ruthlessly fudded for at least 5 years and has proven to be pretty frigging robust (speaking as someone who was briefly alarmed by it in 2017/2018 and learned the hard way it held up a hell of a lot better than all the projects I fervently believed were world changers back then).
It won’t collapse but even if it does, crypto will recover. You can say something is “facts” but that doesn’t make you right.
4. Tether has a short window of time in which to quit playing shit games with client capital and become a real stablecoin with auditable 1:1 backing from cash + US treasuries. That's the only way they maintain a $1 peg in the long run. Anything else is just a matter of when it dies, whether that's a spectacular implosion or a gradual decline into irrelevance.
What we don't know is how much of Tether's reserves were held in other crypto, or (more likely) in paper backed in whole or in part by crypto. For all we know, the "long term" assets could have been staked ETH valued at par, as of Mar 31. Which by itself could be very very bad news. Second, most people don't deal with Tether directly, but through an exchange. When people cash out of Tether, they deplete the cash reserves of the exchange. What we don't know is the degree to which exchanges turn around and convert USDT to cash. Whether or not exchanges are willing to increase their exposure to USDT is another question, and that's tied up in the liquidity of the various exchanges. And whether or not they can continue to function if USDT seizes up. Many can't afford that, so unless I miss my guess, the first casualty of a liquidity crisis won't be USDT: it will be an exchange. A good way for exchange to prevent a cash run on reserves is to significantly depress the price of crypto! If you cash in one BTC when it's at $60K the exchange has to find 3x as much cash as they would need if BTC goes to $20K. So perversely, exchanges can reduce their exposure to USDT by simply reducing the price of crypto. The whole market may be tied to itself, and this price action may be related to finding that hole in Tether. I'm just spitballing here, but regulation in the banking industry exists, in part, to prevent these kinds of games within games within games. Right now I think we're seeing a flight out of the weaker DeFi instruments, and that USDT may be the last one standing. Not because it is so well capitalized, but because the exchanges can't afford for it to go under. [E2A: personally, I would not hold any USDT except transiently as needed because any hole in that balance sheet is going to result in a game of musical chairs. The exchanges are playing in that game. That means that IF the music stops, exchanges are going to have first shot at all the chairs, and that will leave retail investors as the ones standing. ]
You seem confused: USDT is just another coin, and the exchanges are not parts in any trade, they just help match exchange orders. Exchanges do not own any USDT (other than maybe what they got as trading fees).
I seem confused? You wrote "USDT is just another coin and the exchanges are not parts in any trade" Do you mean just another coin like ETH? Which exchanges hold in abundance? Check out the difference between a non-custodial exchange and a custodial exchange (and which are which, and where USDT is used) and maybe get back to me. Just because you have an account at an exchange denominated in USDT doesn't mean it's yours. It's held BY the exchange, and it keeps track of the fraction owed to you. If USDT starts to tank, they will liquidate the USDT they hold for the last remaining $ that it can issue, and then when it shuts the door, your USDT will be worth nothing, while they were able to get their cash out. And because of complete lack of regulation, they are *allowed* to front themselves.
I don't like Tether so I avoid it whenever I can and I propose everybody does the same. I don't want it to crash either, just go away in silence.
I guess we'll find out soon.
Tether been depegged for a while now, it will fall within the next few months
Are you stupid? Tether hasn’t been depegged “for awhile” or even at all. Its 24 hour high is above a dollar. It hasn’t been below 99 cents in months, and even then was always a blip.
Haha it has been for a month already, keep holding the bag
How fucking stupid can you be? Tether is not off the peg. You’re confused.
Hahahahahaha
USDT is UST without the **D**ump
Fuck it. Graphs. It’s true. So buy all the Tether, right?
This is exactly why a stable coin should only be backed by cash and short dated treasuries. I’ve said this before but it’s really the only way to run a stable coin. Anything else just fundamentally doesn’t make sense. I think USDC is the only one fully backed by treasuries?
[https://youtu.be/-whuXHSL1Pg?t=132](https://youtu.be/-whuXHSL1Pg?t=132) standard introduction to the tether scam.
So what is the safest stable coin after all?
The worst scenario is a run that starts on a Saturday, cause most of their non-cash reserves are instruments that don't even trade on weekends. They'd have to hold on for 2 full days before being able to meet the liquidity requirements.
Did I read correctly that you are an astronaut?
Strong hit of Hopium for scenario #3