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The people writing these articles are astoundingly ignorant yet think themselves geniuses. How is it that they don't understand no one is willing to pay a prem

The people writing these articles are astoundingly ignorant yet think themselves geniuses. How is it that they don't understand no one is willing to pay a premium or sell at a discount for assets who have parity in value? They are confounded that the data (USDT and USD have parity in value) doesn't fit their narrative (USDT doesn't have value) and so look for Procustean methods to fit it: No it's not that the broader market is in agreement that there's value parity, there's something afoot. This is Geocentric and Heliocentric: https://en.wikipedia.org/wiki/Copernican_Revolution#/media/File:Apparent_retrograde_motion.gif https://en.wikipedia.org/wiki/Copernican_Revolution#/media/F...

thwd 8y ago
This! Nobody that uses Tether wants it to be more or less than exactly 1 USD. Its value (its utility, its function) is to equal 1 USD. Anyone placing an order way above or below 1 USD can expect it to never fille and even if it did, the market would correct immediately because it is in the interest of the majority to be tethered to the dollar.
- talltimtom 8y ago
  True, someone trying to cash out a large amount of tether well below 1$ can expect the deal to go unfulfilled while washtrades around 1$ continue.
  - MoBattah 8y ago
    .....not exactly. Most exchanges use NBBO-like mechanisms. "National Best Bid and Offer (NBBO) is a regulation by the United States Securities and Exchange Commission that requires brokers to execute customer trades at the best available ask price when buying securities, and the best available bid price when selling securities." So even if you wanted to sell your Tether for $0.50 each, it'll execute at ~$1.
jen729w 8y ago
Been reading Philip K. Dick recently, have we?
phyalow 8y ago
While I admire your classical musings, they are irrelevant. It is a simple logical deduction for liquidity driven premiums and discounts to exist on assets that are NOT entirely fungible. Tether is NOT fungible back into USD. I can point you towards any number of highly liquid non redeemable ETF's that trade with a basis that is non stationary, or dual listed shares (e.g. China A/H equity classes, worth trillions) which are semi fungible at best due to RMB capital controls, that often trade +/- 5 to 10% 1 sigma away from each other. The fact tether shares many similarities and its basis does NOT move is highly suspicious. >>"They are confounded that the data (USDT and USD have parity in value) doesn't fit their narrative" What is your narrative? USDT I agree in principle does have some value, but it certainly doesn't afford to be given the benefit of doubt. In my experience Occam's Razor does not apply to Finance, where the incentive is to employ complexity and opacity to gain any pecuniary advantage possible. I am sure you agree that the set of circumstances Tethers operators find themselves in dealing with unsophisticated counter parties is rich for asymmetric abuse. Some of the assertions made in the article are misguided; but taking a step back, simply they have produced NO commercially reasonable or acceptable audit of their holdings. Caveat Emptor.

thwd 8y ago

This! Nobody that uses Tether wants it to be more or less than exactly 1 USD. Its value (its utility, its function) is to equal 1 USD. Anyone placing an order way above or below 1 USD can expect it to never fille and even if it did, the market would correct immediately because it is in the interest of the majority to be tethered to the dollar.

talltimtom 8y ago
True, someone trying to cash out a large amount of tether well below 1$ can expect the deal to go unfulfilled while washtrades around 1$ continue.
- MoBattah 8y ago
  .....not exactly. Most exchanges use NBBO-like mechanisms. "National Best Bid and Offer (NBBO) is a regulation by the United States Securities and Exchange Commission that requires brokers to execute customer trades at the best available ask price when buying securities, and the best available bid price when selling securities." So even if you wanted to sell your Tether for $0.50 each, it'll execute at ~$1.

jen729w 8y ago

Been reading Philip K. Dick recently, have we?

phyalow 8y ago

While I admire your classical musings, they are irrelevant. It is a simple logical deduction for liquidity driven premiums and discounts to exist on assets that are NOT entirely fungible. Tether is NOT fungible back into USD. I can point you towards any number of highly liquid non redeemable ETF's that trade with a basis that is non stationary, or dual listed shares (e.g. China A/H equity classes, worth trillions) which are semi fungible at best due to RMB capital controls, that often trade +/- 5 to 10% 1 sigma away from each other. The fact tether shares many similarities and its basis does NOT move is highly suspicious. >>"They are confounded that the data (USDT and USD have parity in value) doesn't fit their narrative" What is your narrative? USDT I agree in principle does have some value, but it certainly doesn't afford to be given the benefit of doubt. In my experience Occam's Razor does not apply to Finance, where the incentive is to employ complexity and opacity to gain any pecuniary advantage possible. I am sure you agree that the set of circumstances Tethers operators find themselves in dealing with unsophisticated counter parties is rich for asymmetric abuse. Some of the assertions made in the article are misguided; but taking a step back, simply they have produced NO commercially reasonable or acceptable audit of their holdings. Caveat Emptor.