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I've been wondering if shorting Tether (though dont think e.g. Binance has it on the list but some new dexs with leverage might allow it) isn't an extremely saf

by Tenoke 6y ago

I've been wondering if shorting Tether (though dont think e.g. Binance has it on the list but some new dexs with leverage might allow it) isn't an extremely safe bet - no chance it will increase in value and a significant chance it will collapse eventually..

zapdrive 6y ago
Or it could just stay the same for years, and you bleed interest on the funding.
rfd4sgmk8u 6y ago
Let me tell you about the swiss franc. It held a government peg 1.20 to the EUR, until one day in 2015 it didn't. Many traders (and whole forex brokerages) who held positions, believing the 1.2 line could never be crossed were, as they say, rekt. There are several ways to take a short position on USDT. You can trade USD for USDT on Kraken exchange. A short position would be depositing USD and placing a limit order under 1:1. This involves locking up capital for the order. If it never loses the peg, you lock up capital forever for 0 gain. You can also borrow Tether via various defi loan markets, but you will have to provide collateral and interest payments. Both have costs, be it fees, interest rates or opportunity cost. No safe bets in this game, except buy and hold bitcoin for periods > halving period.
rawtxapp 6y ago
Considering how heavily manipulated these crypto markets are, I'd say there's no "extremely safe bet".
graeme 6y ago
You have some serious counterparty risk if the short is on something exposed to a btc/crypto drop
mantap 6y ago
I've been reading stories about tether's imminent demise for years and years. It's still going. Sure maybe one day it will collapse. Just don't bet on it happening any time soon.
vkou 6y ago
The problem with gambling on the complete collapse of a financial system is that you not only need to be right - you need to have a way to compel the guy on the other side of the trade to pay up.
space_rock 6y ago
All those exchanges use Tether substantially. A trader takes on all the tether risks by using them
nly 6y ago
What if Tether (the organization) has been buying buying Bitcoin, and for some reason Tether imploding doesn't cause a crash in BTC? It's entirely possible Tether actually have collateral worth more than their claimed 1:1 peg NAV. The 1:1 peg is arbitrary and since they don't allow direct redemptions they could easily pull a stunt like repricing it to $1.50

by Tenoke 6y ago

zapdrive 6y ago

Or it could just stay the same for years, and you bleed interest on the funding.

rfd4sgmk8u 6y ago

Let me tell you about the swiss franc. It held a government peg 1.20 to the EUR, until one day in 2015 it didn't. Many traders (and whole forex brokerages) who held positions, believing the 1.2 line could never be crossed were, as they say, rekt. There are several ways to take a short position on USDT. You can trade USD for USDT on Kraken exchange. A short position would be depositing USD and placing a limit order under 1:1. This involves locking up capital for the order. If it never loses the peg, you lock up capital forever for 0 gain. You can also borrow Tether via various defi loan markets, but you will have to provide collateral and interest payments. Both have costs, be it fees, interest rates or opportunity cost. No safe bets in this game, except buy and hold bitcoin for periods > halving period.

rawtxapp 6y ago

Considering how heavily manipulated these crypto markets are, I'd say there's no "extremely safe bet".

graeme 6y ago

You have some serious counterparty risk if the short is on something exposed to a btc/crypto drop

mantap 6y ago

I've been reading stories about tether's imminent demise for years and years. It's still going. Sure maybe one day it will collapse. Just don't bet on it happening any time soon.

vkou 6y ago

The problem with gambling on the complete collapse of a financial system is that you not only need to be right - you need to have a way to compel the guy on the other side of the trade to pay up.

space_rock 6y ago

All those exchanges use Tether substantially. A trader takes on all the tether risks by using them

nly 6y ago

What if Tether (the organization) has been buying buying Bitcoin, and for some reason Tether imploding doesn't cause a crash in BTC? It's entirely possible Tether actually have collateral worth more than their claimed 1:1 peg NAV. The 1:1 peg is arbitrary and since they don't allow direct redemptions they could easily pull a stunt like repricing it to $1.50