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What I truly don't get from the tether is how its almost at parity on kraken (https://www.kraken.com/charts https://www.kraken.com/charts) You would expect a si

What I truly don't get from the tether is how its almost at parity on kraken (https://www.kraken.com/charts https://www.kraken.com/charts) You would expect a sizable discount going on for all the shennaningans.

256 9y ago
I'm guessing this is because most people who trade tether don't intend on holding it for long, so the "shennanigans" surrounding tether aren't as likely to affect them.
- tehlike 9y ago
  It actually does. A lot of people moved recently to tether due to volatility as a stable value token.
- conanbatt 9y ago
  Thats like saying you dont mind holding a bomb you cant see the time off, because its only going to be a for a short time.
paulgb 9y ago
They could be buying up the excess supply from the reserves. In fact, I thought that was part of the design of Tether, but I haven't really dug into the details. What will be interesting, if that's the case, is what happens if their reserves are not enough to cover the outstanding supply. Things could go sour very fast.
- SwellJoe 9y ago
  They have to buy up the excess supply to keep the Ponzi scheme going. As long as it's lower than the amount they're able to get away with counterfeiting, it's just a cost of doing business. Even Ponzi paid some of his investors. They'll keep buying back Tethers...until one day, they won't. And, I'd guess that day will come when there are a couple billion Tethers out there, and the folks running the scam decide it's enough to buy an island to retire on. What's that you say? There are already a couple billion Tethers? Well...I guess anyone unlucky or dumb enough to be holding Tethers ought to GTFO if they can.
  - conanbatt 9y ago
    Wouldn't that mean Kraken knows the purchasers of excess supply are bitfinex? That's a pretty large bit of info to leave to a competing exchange. Its obvious that holding USDT has lots of exposure, but i dont understand the implication of the bitcoin price today. A 2 billion sellout of crypto must ravage the market. And with such an obviously looming effect, I cant undersatnd how this situation is sustaining itself , even accounting for what you are saying.
    - SwellJoe 9y ago
      Well, I think everyone knows Tether and Bitfinex are the same people. That info leaked months ago (Panama Papers, I think?). The only question remaining is where's the cash? If Kraken and Binance and Poloniex are sending USD to Tether and getting USDT back, they're nuts. I'm guessing people are moving money between exchanges using USDT (which is one of its intended purposes, after all, and a good bit of utility if the steward were trustworthy), and then Tether buys it back, keeping the other exchanges in the dark about what's going on. Given how difficult it is to deal with fiat for crypto exchanges, I think they really want/need Tether to work. If it were legitimate, it would be a great thing...I think there's a lot of wishful thinking keeping anyone at the USDT supporting exchanges from looking too closely. I dunno. It looks so freakin' shady, to me. I don't really understand why seemingly trustworthy exchanges are participating, and it makes me hesitant to deal with any of them (even though I'm not overly fond of Coinbase and its huge fees). Being trustworthy is kinda the most important thing in this market, though.
ht85 9y ago
It's because of arbitrage. If people didn't value tether at $1, then the price for X/USDT pairs (on other exchanges) would be lower. As it isn't the case, if the price dropped below $1, you could buy USDT here, transfer it to a different exchange and make a profit by buying back your coins there.
- tehlike 9y ago
  Bots and arbitrage, yes.
- stale2002 9y ago
  Well that's only if the USDT is actually worth that on the OTHER exchange. You can't engage in arbitrage if nobody is paying more than 50 cents on every dollar.
- conanbatt 9y ago
  Arbitrage explains why prices tend to be the same across exchanges, but it doesnt explain why it isnt discounted today. Kraken is the only one where you trade tethers for dollars that I know of. You cant trade dollars for tethers on tether.to. Its possible tether is able to sell tethers to exchanges alone and mint tokens at 1 on 1 rate and so it should tend to be so, but considering tether is issuing through bitfinex..
  - Zarath 9y ago
    Kraken may be at 1:1, but Bitcoin is currently trading at a $500 (4%) premium on tether based exchanges.
pmorici 9y ago
Kraken is a total disaster. You can barley login and trade on it. The several times I've tried I've never been able to. Point being that the Tether price there is not to be trusted. Can you even move Tether between exchanges?
empath75 9y ago
Bitfinex just needs a bot to buy tether back when the price goes below $1.00. It’s fairly low volume so probably doesn’t cost much on most days. If there’s a run on the bank, that will change, though.
- conanbatt 9y ago
  This is akin to bitfinex/tether actually redeeming USDT for USD, which is precisely what they don't do.
ActsJuvenile 9y ago
Check out the depth chart for USDT/USD pair. There is no buy-side demand at all. Anyone selling Tether would have to eat huge losses by selling their USDT well under $1. It is human nature to not sell at a loss, so no one is selling. On the other hand, it takes very little effort ($100K) to prop USDT price up. Rumor has it that Tether themselves are propping up the price on Kraken. Sad part is that once the prop crumbles, everyone in sell-side of the chart will become bagholders because USDT will be worth nearly zero.
conanbatt 9y ago
Since I posted this, tether has gone down in parity to 0.97. Maybe the news is hitting the market?

256 9y ago

I'm guessing this is because most people who trade tether don't intend on holding it for long, so the "shennanigans" surrounding tether aren't as likely to affect them.

tehlike 9y ago
It actually does. A lot of people moved recently to tether due to volatility as a stable value token.
conanbatt 9y ago
Thats like saying you dont mind holding a bomb you cant see the time off, because its only going to be a for a short time.

paulgb 9y ago

They could be buying up the excess supply from the reserves. In fact, I thought that was part of the design of Tether, but I haven't really dug into the details. What will be interesting, if that's the case, is what happens if their reserves are not enough to cover the outstanding supply. Things could go sour very fast.

SwellJoe 9y ago
They have to buy up the excess supply to keep the Ponzi scheme going. As long as it's lower than the amount they're able to get away with counterfeiting, it's just a cost of doing business. Even Ponzi paid some of his investors. They'll keep buying back Tethers...until one day, they won't. And, I'd guess that day will come when there are a couple billion Tethers out there, and the folks running the scam decide it's enough to buy an island to retire on. What's that you say? There are already a couple billion Tethers? Well...I guess anyone unlucky or dumb enough to be holding Tethers ought to GTFO if they can.
- conanbatt 9y ago
  Wouldn't that mean Kraken knows the purchasers of excess supply are bitfinex? That's a pretty large bit of info to leave to a competing exchange. Its obvious that holding USDT has lots of exposure, but i dont understand the implication of the bitcoin price today. A 2 billion sellout of crypto must ravage the market. And with such an obviously looming effect, I cant undersatnd how this situation is sustaining itself , even accounting for what you are saying.
  - SwellJoe 9y ago
    Well, I think everyone knows Tether and Bitfinex are the same people. That info leaked months ago (Panama Papers, I think?). The only question remaining is where's the cash? If Kraken and Binance and Poloniex are sending USD to Tether and getting USDT back, they're nuts. I'm guessing people are moving money between exchanges using USDT (which is one of its intended purposes, after all, and a good bit of utility if the steward were trustworthy), and then Tether buys it back, keeping the other exchanges in the dark about what's going on. Given how difficult it is to deal with fiat for crypto exchanges, I think they really want/need Tether to work. If it were legitimate, it would be a great thing...I think there's a lot of wishful thinking keeping anyone at the USDT supporting exchanges from looking too closely. I dunno. It looks so freakin' shady, to me. I don't really understand why seemingly trustworthy exchanges are participating, and it makes me hesitant to deal with any of them (even though I'm not overly fond of Coinbase and its huge fees). Being trustworthy is kinda the most important thing in this market, though.

ht85 9y ago

It's because of arbitrage. If people didn't value tether at $1, then the price for X/USDT pairs (on other exchanges) would be lower. As it isn't the case, if the price dropped below $1, you could buy USDT here, transfer it to a different exchange and make a profit by buying back your coins there.

tehlike 9y ago
Bots and arbitrage, yes.
stale2002 9y ago
Well that's only if the USDT is actually worth that on the OTHER exchange. You can't engage in arbitrage if nobody is paying more than 50 cents on every dollar.
conanbatt 9y ago
Arbitrage explains why prices tend to be the same across exchanges, but it doesnt explain why it isnt discounted today. Kraken is the only one where you trade tethers for dollars that I know of. You cant trade dollars for tethers on tether.to. Its possible tether is able to sell tethers to exchanges alone and mint tokens at 1 on 1 rate and so it should tend to be so, but considering tether is issuing through bitfinex..
- Zarath 9y ago
  Kraken may be at 1:1, but Bitcoin is currently trading at a $500 (4%) premium on tether based exchanges.

pmorici 9y ago

Kraken is a total disaster. You can barley login and trade on it. The several times I've tried I've never been able to. Point being that the Tether price there is not to be trusted. Can you even move Tether between exchanges?

empath75 9y ago

Bitfinex just needs a bot to buy tether back when the price goes below $1.00. It’s fairly low volume so probably doesn’t cost much on most days. If there’s a run on the bank, that will change, though.

conanbatt 9y ago
This is akin to bitfinex/tether actually redeeming USDT for USD, which is precisely what they don't do.

ActsJuvenile 9y ago

Check out the depth chart for USDT/USD pair. There is no buy-side demand at all. Anyone selling Tether would have to eat huge losses by selling their USDT well under $1. It is human nature to not sell at a loss, so no one is selling. On the other hand, it takes very little effort ($100K) to prop USDT price up. Rumor has it that Tether themselves are propping up the price on Kraken. Sad part is that once the prop crumbles, everyone in sell-side of the chart will become bagholders because USDT will be worth nearly zero.

conanbatt 9y ago

Since I posted this, tether has gone down in parity to 0.97. Maybe the news is hitting the market?