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If everyone has an expectation that USD-USDT is 1:1, why would anyone sell for substantially less, outside of insolvency scares? Better just to wait until your
by hackinthebochs 8y ago
If everyone has an expectation that USD-USDT is 1:1, why would anyone sell for substantially less, outside of insolvency scares? Better just to wait until your order can be filled at the known value. Bitcoin-USD and Bitcoin-USDT arbitrage probably happens at a much faster rate than USD-USDT demand, and so any USD-USDT decoupling is quickly arbitraged back to 1:1.
And its not like USD-USDT hasn't become uncoupled before. It's been as low as .7 in the past.
- JumpCrisscross 8y ago> Better just to wait until your order can be filled at the known value You're describing a shallow order book. This happens quite frequently in less-liquid markets. The transaction signature of a shallow order book is large orders prompting a pause in trading, as the order book is drained and refilled. Contrast that to a hyper-liquid market like that for on-the-run Treasuries. You'll have a mix of price and time preferences, with some people wanting immediacy and others willing to provide it for a discount/premium. The presence of continuous, non-volatile trading--particularly on the downticks, given a pegged asset--is very unusual. Enough so that I've never seen anything like it before in a properly-functioning market. Which is suspicious.
- thwd 8y agoAFAIK Tether is always liquid because the coins are minted on-demand. There is never scarcity. No incentive to provide immediacy.