> Tether creates tokens to defend the price, otherwise the sell side of the tether pairs will dry up, forcing their price over 1$ where they would cease to be

> Tether creates tokens to defend the price, otherwise the sell side of the tether pairs will dry up, forcing their price over 1$ where they would cease to be a stable useful unit. This makes sense as to why they have to create Tether during rushes out of cryptocurrency, in order to stablize the price of Tether, but Tether seems to print whatever they want, whenever they want. That behavior is suspect as normally printing behavior is constrained by financial factors behind such a company. Central banks of smaller countries have tried to peg their local currencies against USD and other such things, but it often breaks those small country central banks when there are big price fluctuations. I am of the opinion that USDT is not backed by USD but they are basically running a hedging operation, probably primarily invested in cryptocurrencies, in order to cover their expected risk exposure. That all works until a black swan event happens and then we realize that USDT is just a mirage and it is forced to unpeg from USDT (and don't fool yourself that it will appreciate once it is unpegged.) Basically if you accept this claim that this is how USDT operates then it is a buffer against BTC falling as it injects money into the system at specifically those times. And then because USDT is also backed by the same cryptocurrency (at least in part, I am pretty sure it isn't backed by actual USD) that it tends to prop up, we are into a incentuous circle that could potentially be popped. It is scary as fuck that a lot of exchanges deal completely in cryptocurrencies and then also USDT as the only "real currency", but itself is also probably funny money. I feel like I must be crazy because it seems like so much of this is a house of cards with USDT at the center of it.