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> There is an easy way. Swap USDT to USDC on Curve. Deposit USDC on Coinbase. Convert USDC to USD on Coinbase. Withdraw USD. Then what is your explanation for

> There is an easy way. Swap USDT to USDC on Curve. Deposit USDC on Coinbase. Convert USDC to USD on Coinbase. Withdraw USD. Then what is your explanation for why it is not possible to directly exchange USDT for USD, there must be a reason that no exchange wants to do that. > that most of the market doesn't perceive a risk. That is absolutely no indicator for safety.

vidarh 6y ago
> Then what is your explanation for why it is not possible to directly exchange USDT for USD, there must be a reason that no exchange wants to do that. https://global.bittrex.com/Market/Index?MarketName=USD-USDT https://global.bittrex.com/Market/Index?MarketName=USD-USDT
- pas 6y ago
  Do they process withdrawals in a reasonable time?
  - vidarh 6y ago
    I have not had problems with them, but I'm also not doing any large transactions.
    - grlass 6y ago
      Also note Kraken, withdrawals are as fast as a wire transfer (so a few days): https://www.kraken.com/en-us/prices/usdt-tether-usd-price-chart/usd-us-dollar?interval=1m https://www.kraken.com/en-us/prices/usdt-tether-usd-price-ch... What I'm not sure is how that market connects to Tether's bank accounts increasing or decreasing in holdings. This is all third-party exchanges, presumably with other customers as the counterparty.
  - boring_twenties 6y ago
    Dunno about Bittrex but Kraken also has a USD/USDT pair. Withdrawals via wire transfer take around 2 days.
dcolkitt 6y ago
> That is absolutely no indicator for safety. Currently, several billion in value is locked into Defi-based liquidity pools with USDT. If USDT collapses tomorrow, the stakers will lose nearly all of their principal. (Fast traders will quickly swap worthless USDT for all the USDC in the pool, before hardly anyone has time to remove liquidity.) The largest of these pool, currently pays about 2.6%.[1] Even if all of that return reflects USDT credit risk, that market implies a 1/50 chance of USDT collapsing within the next year. I'm not saying the market is necessary correct. But what I am saying is that very deep, liquid markets are not pricing any significant USDT risk. If you really disagree, you can even short USDT, by borrowing USDT on Compound at 4.2%. Then use that to buy USDC and supply it on Compound at 4.9%.[2] If USDT collapses, you'll make nearly 100% as you'll only have to buy back now worthless USDC. In fact the market will even pay you take this position, with the only risk being if USDC collapses relative to USDT. [1]https://www.curve.fi/3pool https://www.curve.fi/3pool [2]https://compound.finance/markets https://compound.finance/markets
- ac29 6y ago
  > If you really disagree, you can even short USDT, by borrowing USDT on Compound at 4.2%. Then use that to buy USDC and supply it on Compound at 4.9%.[2] If USDT collapses, you'll make nearly 100% as you'll only have to buy back now worthless USDC. In fact the market will even pay you take this position, with the only risk being if USDC collapses relative to USDT. This trade involves risk, and not just the direct USDT risk. If it didn't, there's no particular reason multi-billion dollar hedge funds wouldn't buy this down to the yield of an equivalent US treasury or similar.
  - lovedswain 6y ago
    > If it didn't, there's no particular reason multi-billion dollar This is true in theory but in practice it seems much more commonly false. Even in vastly more mature and liquid markets, straightforward arbitrages can persist for years and in some cases decades, even after an inefficiency becomes public knowledge

vidarh 6y ago

> Then what is your explanation for why it is not possible to directly exchange USDT for USD, there must be a reason that no exchange wants to do that. https://global.bittrex.com/Market/Index?MarketName=USD-USDT https://global.bittrex.com/Market/Index?MarketName=USD-USDT

pas 6y ago
Do they process withdrawals in a reasonable time?
- vidarh 6y ago
  I have not had problems with them, but I'm also not doing any large transactions.
  - grlass 6y ago
    Also note Kraken, withdrawals are as fast as a wire transfer (so a few days): https://www.kraken.com/en-us/prices/usdt-tether-usd-price-chart/usd-us-dollar?interval=1m https://www.kraken.com/en-us/prices/usdt-tether-usd-price-ch... What I'm not sure is how that market connects to Tether's bank accounts increasing or decreasing in holdings. This is all third-party exchanges, presumably with other customers as the counterparty.
- boring_twenties 6y ago
  Dunno about Bittrex but Kraken also has a USD/USDT pair. Withdrawals via wire transfer take around 2 days.

dcolkitt 6y ago

> That is absolutely no indicator for safety. Currently, several billion in value is locked into Defi-based liquidity pools with USDT. If USDT collapses tomorrow, the stakers will lose nearly all of their principal. (Fast traders will quickly swap worthless USDT for all the USDC in the pool, before hardly anyone has time to remove liquidity.) The largest of these pool, currently pays about 2.6%.[1] Even if all of that return reflects USDT credit risk, that market implies a 1/50 chance of USDT collapsing within the next year. I'm not saying the market is necessary correct. But what I am saying is that very deep, liquid markets are not pricing any significant USDT risk. If you really disagree, you can even short USDT, by borrowing USDT on Compound at 4.2%. Then use that to buy USDC and supply it on Compound at 4.9%.[2] If USDT collapses, you'll make nearly 100% as you'll only have to buy back now worthless USDC. In fact the market will even pay you take this position, with the only risk being if USDC collapses relative to USDT. [1]https://www.curve.fi/3pool https://www.curve.fi/3pool [2]https://compound.finance/markets https://compound.finance/markets

ac29 6y ago
> If you really disagree, you can even short USDT, by borrowing USDT on Compound at 4.2%. Then use that to buy USDC and supply it on Compound at 4.9%.[2] If USDT collapses, you'll make nearly 100% as you'll only have to buy back now worthless USDC. In fact the market will even pay you take this position, with the only risk being if USDC collapses relative to USDT. This trade involves risk, and not just the direct USDT risk. If it didn't, there's no particular reason multi-billion dollar hedge funds wouldn't buy this down to the yield of an equivalent US treasury or similar.
- lovedswain 6y ago
  > If it didn't, there's no particular reason multi-billion dollar This is true in theory but in practice it seems much more commonly false. Even in vastly more mature and liquid markets, straightforward arbitrages can persist for years and in some cases decades, even after an inefficiency becomes public knowledge