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This does nothing to explain the purpose of Tether. If Exchange A has no "traditional banking ties" but is where I want to trade so I need to buy crypto throug
by shuntress 6y ago
This does nothing to explain the purpose of Tether.
If Exchange A has no "traditional banking ties" but is where I want to trade so I need to buy crypto through Exchange B first in order to trade that crypto on Exchange A why would I buy Tether instead of BTC through Exchange B?
- briatx 6y agoMaybe you do buy BTC on Exchange B. Then you transfer to Exchange A and sell, and what do you get when you sell? Tether. The point of Tether initially is regulatory arbitrage for Tether based exchanges. It gives them a fiat substitute without having regulatory baggage that trading in actual money would require. Tether then turned into a lifeline for a Bitfinex bailout and now acts as a (almost assuredly illicit) liquidity provider to Tether based markets. The only reason Tether is worth a dollar at this point is because the Tether denominated Exchanges say it is worth a dollar. They are really what backstop Tether now and are fully complicit.
- ChainOfFools 6y agoseems like a constant long term rise in BTC valuation is what keeps them backstopped in turn, then. well that and conveniently reliable outages in the middle of every major BTC sell-off.