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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
by 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 agoBots and arbitrage, yes.
- stale2002 9y agoWell 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 agoArbitrage 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 agoKraken may be at 1:1, but Bitcoin is currently trading at a $500 (4%) premium on tether based exchanges.