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I'm wondering how many people are shorting USDT on Kraken? The potential downside is having to pay interest. The upside is 100% win. With enough short position,

I'm wondering how many people are shorting USDT on Kraken? The potential downside is having to pay interest. The upside is 100% win. With enough short position, Tether will run out of funds and the price will have to crash. Disclosure: I'm short USDT.

bhouston 9y ago
I have a theory that some of the market crash in December was because of selling Bitcoin (originally gotten from USDT) for USD in order to fill their reserves of backing USD. I think that USDT could be moderately sophisticated in that they could have fulfilled their coffers via market manipulation. If they were smart and brazen, I think they could have possibly pulled it off. One would have to study the market inflows and outflows. This type of pump and dump would show up in their books, so a thorough audit would find it. But it may mean that they have a lot of USD now. Thus I am unsure if USDT will technically crash.
- marcandre 9y ago
  Interesting theory. If they indeed hold the USD, they could still run away with it. The 2.3B$ worth of Tether represents more than 75 years worth of gross profit of Bitfinex (see https://www.reddit.com/r/BitcoinMarkets/comments/68wlre/some_numbers_about_bitfinex/ https://www.reddit.com/r/BitcoinMarkets/comments/68wlre/some... ).
ifdefdebug 9y ago
Just tried to short sell USDT on Kraken. Response: Canceled - Insufficient Margin. This means "that the exchange's margin pool for that currency is currently used up" [1]. So this might give you an idea to start with... [1] https://support.kraken.com/hc/en-us/articles/217696017-Insufficient-Margin https://support.kraken.com/hc/en-us/articles/217696017-Insuf...
- jandrese 9y ago
  Or basically: No remaining suckers available for this transaction.
  - tim333 9y ago
    Pretty much. Shorting usually relies on people having deposited the asset (USDT) with the broker (Kraken). When you short the broker sells some of the other person's asset in the market in the basis you'll buy it back if the other person wants their asset back. Presumably they've run out of USDT to sell in that manner.
tim333 9y ago
I managed to short $100 but then couldn't execute on any more. I'd be short boat loads if I could.

bhouston 9y ago

I have a theory that some of the market crash in December was because of selling Bitcoin (originally gotten from USDT) for USD in order to fill their reserves of backing USD. I think that USDT could be moderately sophisticated in that they could have fulfilled their coffers via market manipulation. If they were smart and brazen, I think they could have possibly pulled it off. One would have to study the market inflows and outflows. This type of pump and dump would show up in their books, so a thorough audit would find it. But it may mean that they have a lot of USD now. Thus I am unsure if USDT will technically crash.

marcandre 9y ago
Interesting theory. If they indeed hold the USD, they could still run away with it. The 2.3B$ worth of Tether represents more than 75 years worth of gross profit of Bitfinex (see https://www.reddit.com/r/BitcoinMarkets/comments/68wlre/some_numbers_about_bitfinex/ https://www.reddit.com/r/BitcoinMarkets/comments/68wlre/some... ).

ifdefdebug 9y ago

Just tried to short sell USDT on Kraken. Response: Canceled - Insufficient Margin. This means "that the exchange's margin pool for that currency is currently used up" [1]. So this might give you an idea to start with... [1] https://support.kraken.com/hc/en-us/articles/217696017-Insufficient-Margin https://support.kraken.com/hc/en-us/articles/217696017-Insuf...

jandrese 9y ago
Or basically: No remaining suckers available for this transaction.
- tim333 9y ago
  Pretty much. Shorting usually relies on people having deposited the asset (USDT) with the broker (Kraken). When you short the broker sells some of the other person's asset in the market in the basis you'll buy it back if the other person wants their asset back. Presumably they've run out of USDT to sell in that manner.

tim333 9y ago

I managed to short $100 but then couldn't execute on any more. I'd be short boat loads if I could.