5 ms·

Why didn't Tether collapse last time crypto crashed 80%?

davidgerard 5y ago
When crypto crashed in March 2020, I understand that a lot of the exchanges got together to keep Tether fueled. Note that actual-cash - dollars and treasuries - is the same now as it was in Hoegner's affidavit to the NYAG in 2019. Everything added to the "reserve" since then is not-cash. As I note in the linked article: the market for tethers don't care about Tether's backing, only about Bitcoin number go up. I'm eagerly awaiting Cas Piancey and Bennett Tomlin finishing their book on Tether ...
- thebean11 5y ago
  > I understand that a lot of the exchanges got together to keep Tether fueled. Keep it fueled how? What were they purchasing it with? > As I note in the linked article: the market for tethers don't care about Tether's backing, only about Bitcoin number go up. I totally get this, but what I don't understand is why Tether doesn't trade at a discount, neither in crypto pairs or USDT/USD pairs (say on Coinbase or Kraken).
  - davidgerard 5y ago
    I don't get it either. But nobody ever seems to stress the USDT pairs? I'm amazed nobody's trying to cash out of tether with the pair on Coinbase. Easier to move bitcoins from the tether exchanges to Coinbase and cash out there, I guess.
    - graeme 5y ago
      Has coinbase started full USDT-USD trading yet? Their announcement said there were three phases to full trading: https://blog.coinbase.com/tether-usdt-is-launching-on-coinbase-pro-3a1353060e41 https://blog.coinbase.com/tether-usdt-is-launching-on-coinba...
      - thebean11 5y ago
        I see the USDT/USD pair on Coinbase Pro, I think it's tradable? You could always go USDT -> BTC -> USD, just more fees that way.
    - ryanlol 5y ago
      > I'm amazed nobody's trying to cash out of tether with the pair on Coinbase. Nobody is having trouble cashing out from tether.
      - davidgerard 5y ago
        no, because Tether's TOS literally says they can't!
        ryanlol 5y ago
        The TOS is pretty meaningless given current exchange volumes. If you somehow ended up with billions of dollars in tether you’d have no difficulty cashing it out to usd.

When crypto crashed in March 2020, I understand that a lot of the exchanges got together to keep Tether fueled. Note that actual-cash - dollars and treasuries - is the same now as it was in Hoegner's affidavit to the NYAG in 2019. Everything added to the "reserve" since then is not-cash. As I note in the linked article: the market for tethers don't care about Tether's backing, only about Bitcoin number go up. I'm eagerly awaiting Cas Piancey and Bennett Tomlin finishing their book on Tether ...

thebean11 5y ago
> I understand that a lot of the exchanges got together to keep Tether fueled. Keep it fueled how? What were they purchasing it with? > As I note in the linked article: the market for tethers don't care about Tether's backing, only about Bitcoin number go up. I totally get this, but what I don't understand is why Tether doesn't trade at a discount, neither in crypto pairs or USDT/USD pairs (say on Coinbase or Kraken).
- davidgerard 5y ago
  I don't get it either. But nobody ever seems to stress the USDT pairs? I'm amazed nobody's trying to cash out of tether with the pair on Coinbase. Easier to move bitcoins from the tether exchanges to Coinbase and cash out there, I guess.
  - graeme 5y ago
    Has coinbase started full USDT-USD trading yet? Their announcement said there were three phases to full trading: https://blog.coinbase.com/tether-usdt-is-launching-on-coinbase-pro-3a1353060e41 https://blog.coinbase.com/tether-usdt-is-launching-on-coinba...
    - thebean11 5y ago
      I see the USDT/USD pair on Coinbase Pro, I think it's tradable? You could always go USDT -> BTC -> USD, just more fees that way.
  - ryanlol 5y ago
    > I'm amazed nobody's trying to cash out of tether with the pair on Coinbase. Nobody is having trouble cashing out from tether.
    - davidgerard 5y ago
      no, because Tether's TOS literally says they can't!
      - ryanlol 5y ago
        The TOS is pretty meaningless given current exchange volumes. If you somehow ended up with billions of dollars in tether you’d have no difficulty cashing it out to usd.