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And yet it's still 1:1 on coin market cap and everyone is all "what me worry?"
by carrja99 7y ago
And yet it's still 1:1 on coin market cap and everyone is all "what me worry?"
- gridlockd 7y agoIf you don't plan on holding Tether for a longer time, the chances of some catastrophic pricing event (such as full seizure) are slim. That risk is weighed the utility of sending Tethers around. If Tether was somehow backed 100% by an assortment of reputable institutions, it would probably trade at 5% premium to its face value, purely due to its utility.
- tim333 7y agoMore surprisingly the market cap on coinmarketcap is at $2850m, up from $2845m a week or so ago when the news hit. You'd imagine at least some people would be cashing in Tethers for other assets (BTC, USD) and so the number of Tethers out there would drop. It shows daily trading volume of $12,308,023,802 USD yet the market cap doesn't budge significantly. Something seems not to add up. By the way I just tried selling 1000 tether short on Kraken. Dunno if anyone else is trying to trade this thing?
- village-idiot 7y agoTether is basically a one way ratchet to keep money in the crypto system. You can trade Tether for USD on various exchanges but actually selling Tether back to Tether itself, which would reduce the market cap, is restricted heavily. The result is that if you trade Tether to someone else on Kraken for USD or BTC, the Tether market cap remains unchanged, which I suspect was the point.
- tim333 7y agoMaybe though I figure they must be buying back to keep the price above 99c. My hypothesis is they are burning through the cash but not showing it as if they showed the cash going 2bn, 1.5bn... there'd be a bank run of people trying to get out before it was gone.
- village-idiot 7y agoI'm not really sure how Tether is maintaining their $1 peg on the open exchanges, it seems to me that they shouldn't be. But explaining why the market cap hasn't gone down is very easy, it's very hard to actually destroy Tether.