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Shaaaaady. The NYGA report on Tether is due today. Tether is completely insolvent, and once the rug is pulled, all of the exchanges are going to realize that a
by Mizza 5y ago
Shaaaaady.
The NYGA report on Tether is due today. Tether is completely insolvent, and once the rug is pulled, all of the exchanges are going to realize that all of their "stable" reserves are worthless and they can't pay out what they're storing for customers, and the price will tumble all the way down as there's a run on the pseudo-banks that can't payout.
Or not, what do I know.
- ojr 5y agoYou do know that Coinbase has a $50k a day withdrawal limit? A lot of doomsday scenarios leave out this important detail when talking about a hypothetical bank run.
- JackFr 5y ago> You do know that Coinbase has a $50k a day withdrawal limit? On the day you might think that limit matters, it's not really gonna matter.
- loceng 5y agoIt still would slow down a bank run, and Coinbase conveniently/suspiciously going down when bank runs seem to start would further cut off impulse selling - and arguably long enough for manipulation to happen elsewhere to turn price into upward trend again to quell impulse selling by potentially artificially making the price look like it's rebounding.
- simonh 5y agoWhat's to stop me opening 10x accounts of $50k each and pulling them all out at the same time?
- 988747 5y agoI guess the fact that they follow KYC requirements and not allow anonymous accounts? You would have to create 10 fake identities for yourself first.
- simonh 5y agoHuh, looks like they're better organised than I expected, thanks.
- randomopining 5y agoYou need to provide KYC info to open an account right?
- boardwaalk 5y agoIt doesn’t take many people for that to multiply into many millions of dollars…
- andrewmutz 5y agoWithdrawal limit or sell limit? Presumably, people can sell all their holdings and withdraw over time.
- DebtDeflation 5y ago>Coinbase has a $50k a day withdrawal limit Given the price volatility of crypto, that sounds absolutely insane to me. Also, I don't think this prevents a run, on the contrary, when everyone hits the sell button and cannot actually exit then panic will ensue.
- loceng 5y agoTrue but it still makes a single day hit via Coinbase users predictable - which gives them data they'd need to pull different levers including when they use reserve funds they're controlling for buy orders from large institutions; likewise they'll know when the bank run is trending too fast and they'd need to hit the breaks by making Coinbase inaccessible.
- j3th9n 5y agoA withdrawal limit has nothing to do with being able to exit a trade from BTC to dollars.
- DebtDeflation 5y agoThe exchanges handle that part of the "problem" by simply having an outage. The withdrawal limit solves the rest of the problem by limiting how much USDT can be converted to USD.
- dragontamer 5y agoThat's a USD limit. Since Coinbase is FDIC insured, I expect they have the cash-reserves to actually survive a run denominated in dollars. Even if Coinbase itself goes under, FDIC will make your dollar value whole (up to $250,000 per banking institution) You know, the whole benefit of being in the USD. The made up rules of society that provide stability in times of crisis.
- beckler 5y agoCoinbase and FDIC insurance seems tricky at best... I think it only covers deposits made via cash from federally recognized institutions, and will only be covered if you leave it as cash. If you are transferring tokens in and/or converting tokens to cash, I don't believe those transactions would meet the criteria to be covered by FDIC at that point. I might be wrong on that assumption, but FDIC is only deposit insurance, not withdraw insurance, and its under very specific terms.
- dragontamer 5y agoIf an FDIC insured account says "$100,000" in it, and then Coinbase goes under... you get $100,000 from it. Maybe in a few months after bankruptcy court figures out the details. But... yeah, the FDIC insurance definitely covers the stated balance.
- beckler 5y agoIf you have $99,990 in BTC, and $10 in cash, only the $10 is covered. Coinbase could shut down converting crypto to cash at any time. There is no promise or guarantee that they have to allow cash exchanges or deposits, since they're basically buying and selling crypto on your behalf.
- dragontamer 5y ago> If you have $99,990 in BTC, and $10 in cash, only the $10 is covered. By the FDIC. Of course, FDIC only covers dollar-denominated balances (savings accounts, checking accounts, etc. etc.). Even money-market accounts (very cash-like) are NOT covered by FDIC, which is why money-markets get a wee bit of a bump in %yield. Coinbase claims they have the BTC insured through some other means. I don't know how to look into those details or how trustworthy it'd be (ex: AIG "insured" a bunch of mortgages through Credit Default Swaps, which ended up being worthless). But overall, the idea of losing a security through various means (ex: Credit Default Swap "insurance" turns out to be a sham and the mortgage debt is all worthless) is kind of "normal" in terms of financial markets. Similarly, if all the BTC disappeared it'd be terrible for BTC-holders, but I think people generally understand that those risks exist. ---------- Look, I think Cryptocoins are stupid at this point (even proof of stake, but that's another thing). And Coinbase's service going in-and-out over the past day or so is clearly a threat (if BTC moves while Coinbase is down, you lose your opportunity to buy-and/or-sell at the prices you want). But I don't think there's anything shady going on at Coinbase specifically. ------ Now if you want to talk about shady business, we can talk Binance, Bitfinex, and Tethers. Plenty of shady things going around in the cryptoworld.
- dudus 5y agoI did notice they stopped printing some time this week after months adding billions of dollars. For anyone curious you can easily see tether printing by checking at USDT market cap increase.
- idiotsecant 5y agoI've been hearing the same thing about tether for about half a decade now. We all know it's insolvent. Apparently it doesn't matter.
- grey-area 5y agoUntil it does. If everyone tries to get out of tether at once there could be a run on the currency and a collapse. If tether has been manipulating prices (seems likely) that will also come out in the crash.
- dcolkitt 5y agoAs of press time, USDT (Tether) is currently trading at a slight premium to USDC[1]. There's no indication that the market is pricing an imminent collapse to Tether. [1]https://info.uniswap.org/#/pools/0x7858e59e0c01ea06df3af3d20ac7b0003275d4bf https://info.uniswap.org/#/pools/0x7858e59e0c01ea06df3af3d20...
- grey-area 5y agoI don't trust those prices I'm afraid - the price of most cryptocurrencies is manipulated heavily, and this one in particular by printing tether - the peg is a lie (as shown by AG investigation), the backing is a lie (as shown by Tether's admissions), and it's going to zero eventually IMO when the lies unravel. See this recent story for more detail: https://news.ycombinator.com/item?id=27151370 https://news.ycombinator.com/item?id=27151370
- jtbayly 5y agoCurrently people are fleeing to Tether, so of course the price is up. The implication of the parent comment was that the Tether printer could be getting out today, which would cause BTC to drop. The question then becomes what happens tomorrow. Are people going to try to get out of the Tether that they've jumped into today by going to BTC or USD? If they go to BTC, then no problem, the price goes back up (some). If they try to go to cash, BTC keeps dropping. Tether's value doesn't have to crash for the Tether machine to stop running and cause a BTC crash. Though, at some point in the process it would start dropping, and that would then cause a further BTC price drop.
- deleted 5y ago[deleted]
- keymone 5y agoImagine still repeating the same “tether is about to collapse” fairy tale in 2021 Personally I don’t care - let it collapse if they did anything shady, but this zerohedge-esque “broken clock” strategy is extremely amusing.