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A simple figure to put this in perspective: there are currently $2,248,665,722.36 (that's $2 billion) Tether in circulation, which are all supposed to be backed

A simple figure to put this in perspective: there are currently $2,248,665,722.36 (that's $2 billion) Tether in circulation, which are all supposed to be backed 1:1 by USD. https://wallet.tether.to/transparency https://wallet.tether.to/transparency

prostoalex 9y ago
It’s not crystal clear anymore that USD is the only backing, this Bitfinex employee comment suggests it could be other cryptocurrencies (without expanding on mechanics) https://mobile.twitter.com/Bitfinexed/status/935333097377329152 https://mobile.twitter.com/Bitfinexed/status/935333097377329...
- blocksceptic 9y ago
  This guy has an interesting theory about how this may have come about: https://www.reddit.com/r/Buttcoin/comments/7sr33e/i_have_a_theory_that_explains_why_bitfinextether/ https://www.reddit.com/r/Buttcoin/comments/7sr33e/i_have_a_t...
- askmike 9y ago
  The picture in that tweet (IMO) only states that a lot of people who get their hands on USDT didn't buy them with USD but with crypto (on any of the big no FIAT exchanges like Binance, Bittrex, etc). This can at some point create a price difference between USDT and USD that people who do have access to redeem Tether will arb - the people buying USDT on these exchanges are driving up the demand for USDT. IMO seeing anything else in that comment is conspiracy (which might or might not be true, but you can't read that out of the comment).
- bhouston 9y ago
  I strongly believe that USDT isn't fully backed by USD. They have repeatedly said it is but I do not believe it. Now we have a bit of proof that Tether has been lying or misleading via this Bitfinexed employee? If it is backed by one or more cryptocurrencies that is better than nothing, but it means that there is significant risks that in a large market correction in cryptocurrency the backing of USDT can vanish from underneath it. Back in the dotcom bubble nearly every company was causing the market to go up because they were all spending VC. It was sort of an fragile ecosystem because no one was making money, but everyone was spending it, and then the music stopped and a good portion were wiped out. The music could stop and USDT could run into significant issues. I am reminded of the movie The Big Short. I do think there is a bet here (like many others), but how to actually realize it and also how long will it take for this to be exposed? "The Market Can Remain Irrational Longer Than You Can Remain Solvent"
- Nursie 9y ago
  >> this Bitfinex employee comment suggests it could be other cryptocurrencies If it's other crypto then surely the backing of tether is at-risk in any market crash just as much as any other crypto-currency. Surely that entirely defeats the whole point?
- empath75 9y ago
  In the event of a run on tether means they’ll have to sell crypto to meet demand, which sounds like they’ll crash the price and lose the backing.

prostoalex 9y ago

It’s not crystal clear anymore that USD is the only backing, this Bitfinex employee comment suggests it could be other cryptocurrencies (without expanding on mechanics) https://mobile.twitter.com/Bitfinexed/status/935333097377329152 https://mobile.twitter.com/Bitfinexed/status/935333097377329...

blocksceptic 9y ago
This guy has an interesting theory about how this may have come about: https://www.reddit.com/r/Buttcoin/comments/7sr33e/i_have_a_theory_that_explains_why_bitfinextether/ https://www.reddit.com/r/Buttcoin/comments/7sr33e/i_have_a_t...
askmike 9y ago
The picture in that tweet (IMO) only states that a lot of people who get their hands on USDT didn't buy them with USD but with crypto (on any of the big no FIAT exchanges like Binance, Bittrex, etc). This can at some point create a price difference between USDT and USD that people who do have access to redeem Tether will arb - the people buying USDT on these exchanges are driving up the demand for USDT. IMO seeing anything else in that comment is conspiracy (which might or might not be true, but you can't read that out of the comment).
bhouston 9y ago
I strongly believe that USDT isn't fully backed by USD. They have repeatedly said it is but I do not believe it. Now we have a bit of proof that Tether has been lying or misleading via this Bitfinexed employee? If it is backed by one or more cryptocurrencies that is better than nothing, but it means that there is significant risks that in a large market correction in cryptocurrency the backing of USDT can vanish from underneath it. Back in the dotcom bubble nearly every company was causing the market to go up because they were all spending VC. It was sort of an fragile ecosystem because no one was making money, but everyone was spending it, and then the music stopped and a good portion were wiped out. The music could stop and USDT could run into significant issues. I am reminded of the movie The Big Short. I do think there is a bet here (like many others), but how to actually realize it and also how long will it take for this to be exposed? "The Market Can Remain Irrational Longer Than You Can Remain Solvent"
Nursie 9y ago
>> this Bitfinex employee comment suggests it could be other cryptocurrencies If it's other crypto then surely the backing of tether is at-risk in any market crash just as much as any other crypto-currency. Surely that entirely defeats the whole point?
empath75 9y ago
In the event of a run on tether means they’ll have to sell crypto to meet demand, which sounds like they’ll crash the price and lose the backing.