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Not true. In order to make sure there isn't a run on their fake currency, they need to ensure that the balance tips towards buying bitcoin rather than cashing o
by mahemm 9y ago
Not true. In order to make sure there isn't a run on their fake currency, they need to ensure that the balance tips towards buying bitcoin rather than cashing out holdings. If the price goes too low, people will start trying to convert tethers to real money, triggering a crash.
- paulgb 9y agoThis assumes that demand for a USD-correlated currency will grow with the price of Bitcoin, I'm not sure I buy that. Seems like when people are temporarily bearish about BTC is when they are most likely to move from BTC to USDT.
- gnode 9y agoOr (assuming they're legitimate) they just buy back tether with their holdings, raising the price back to roughly $1. Which is the whole point of it supposedly being backed 1-1 in the first place.