4 ms·
People keep posting these articles, and Tether keeps not collapsing. You can exchange your Tethers 1:1 for dollars right now, and have been able to this entire
by darawk 5y ago
People keep posting these articles, and Tether keeps not collapsing. You can exchange your Tethers 1:1 for dollars right now, and have been able to this entire time.
- defen 5y agoPeople have been predicting the imminent implosion of Tether Real Soon Now™ for at least 4 years. At what point can we say we are in Q territory?
- threevox 5y agoThat's a terrible argument in the financial world. Obviously this would be a Black Swan type of event like the 2009 financial crisis - there wouldn't necessarily be foreboding events or even the ability to predict when this would happen. What we can do is analyze the fundamentals, and that's what this guy is doing
- Afforess 5y agoWell, this article is an improvement in that it has a testable prediction. When BTC falls below ~19k, for an extended period, Tether should collapse, according to the article.
- ugopapa 5y agoThe article also said that BTC has already dropped into the dead zone just one year ago during the pandemic crash. Tether is still alive and BTC is worth 10 times more. I don't know how reliable of a prediction this could be.
- darawk 5y agoThese people were making predictions like this in 2017 when btc was at 20k. It crashed brutally for a long time, and nothing happened to Tether. I see no reason whatsoever to think that this time is different. This article relies on the same specious arguments as all the others. The simple fact of the matter is that you cannot maintain a peg in liquid markets for a ponzi asset for any appreciable period of time. Tether trades in liquid markets on many exchanges, and there is no way to fake that. It is possible that Tether is a ponzi, but if it is, it's at least mostly backed. It's certainly true that the company is shady, and probably doing riskier things with the capital than it should be, but the idea that Tether is a complete ponzi that's been used to inflate the entire market is just demonstrably false.
- Mizza 5y agoThe question is what happens when more than 2.9% of people try to do that at the same time.
- matheusmoreira 5y agoWhat happens when everyone tries to withdraw their money from their banks at the same time?
- liaukovv 5y agoCentral bank prints a shitload of money
- LudwigNagasena 5y agoPrinting money in real terms just means taking money from someone who holds it.
- liaukovv 5y agoNot really, the entire function of central bank is that it can create money at will.
- LudwigNagasena 5y agoImagine we own a company, I own 20 stocks, you own 10 stocks. I unilaterally decide to print 10 more stocks and give them to myself. Do you have the same amount of stocks? Yea, but in real terms now you have less stocks. The same thing with money. It doesn’t matter how much money you have, what matters is how much you have it relative to others.
- liaukovv 5y agoI don't believe this would cause any additional inflation, since this is not scenario of creating money, but rather converting one class of money(bank deposit) into another class(reserve notes).
- VHRanger 5y agoThe peg broke by 10% today for ONE HOUR and it caused pandemonium. If the peg breaks more significantly, it'll be worse.
- matheusmoreira 5y ago> The peg broke by 10% today for ONE HOUR and it caused pandemonium. Where was this event recorded? Is there a USDT/USD chart somewhere?
- VHRanger 5y agoSure, go to coingecko or livecoinwatch
- SilasX 5y agoIn don’t see it on the CMC chart. https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- matheusmoreira 5y agoI don't see it either. 1 USDT = 1 USD ± 0.01.
- gruez 5y agohttps://trade.kraken.com/charts/KRAKEN:USDT-USD https://trade.kraken.com/charts/KRAKEN:USDT-USD
- matheusmoreira 5y agoAn increase in price smaller than one cent? This caused pandemonium?
- mmmmmbop 5y agoSee e.g. here: https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- matheusmoreira 5y agoYeah, I don't get it either. Despite all this uncertainty, somehow 1 USD = 1 USDT. The more I read about Tether itself the more it looks like fractional reserve banking to me.
- munk-a 5y agoFractional reserve banking doesn't work without insurance. The practice of fractional reserve banking is actually encouraged by governments around the world due to the generally acceptable amounts of risk and the increase in effective cash supply, these are advantages that are seen to outweigh the risks. The issue is that tether may be imposing these risks on the market without any coordination of either insurance or widespread liquidity benefit - they may just be doing this to increase their effective private market power. In America's situation, FYI, that insurance is supplied in the form of a gigantic economic engine and lots of guns to get more money if needed - elsewhere in the world this risk will often times be subsidized by the IMF.
- mahogany 5y agoSo are you not refuting that the core mechanic looks the same with Tether? The difference is just that the fractional reserve banking system is protected by the government, with guns if necessary?
- munk-a 5y agoI wasn't actually addressing whether tether does or does not under reserve assets. I'm not particularly familiar with tether in general and the article isn't the easiest to follow when it comes to where specifically the money is and how secure those investments are. It'd be a poor practice to have all their backing cash invested into GME, but it'd also be a poor practice to have their cash in actual bills somewhere. Ideally Tether can maintain an oversupply of asset value in various sources that are stable enough to justify less than the oversupply they have.
- ffggvv 5y ago“people keep saying this about bernie madoff but he keeps not going bankrupt. in fact you can withdraw your money right now” - poor sap 2007
- liaukovv 5y agoAll ponzi schemes keep not collapsing until they do
- pavlov 5y agoBernie Madoff was paying redemptions from his "fund" for decades.
- learnstats2 5y agoHow would this prevent it from being a Ponzi scheme? Ponzi schemes do keep paying out, for as long as they are growing.
- threevox 5y agoTechnically, you could withdraw your money for a profit from Bernie Madoff's company for a long time
- SilasX 5y agoInterestingly, the Gemini dollar (GUSD) is backed by real dollars, and is thoroughly audited, but regularly has fluctuations of +/-8%, even when Gemini does redemptions on demand. That’s a lot more than USDT (and DAI, for that matter) vary. https://coinmarketcap.com/currencies/gemini-dollar/ https://coinmarketcap.com/currencies/gemini-dollar/
- FireBeyond 5y agoNo you haven't. Where? How? People have posted bounties for anyone able to show demonstrable proof that they've successfully had Tether exchange their USDT for USD. No-one has claimed them. Last I saw, two things, 1) Tether's TOC said they had no obligation to redeem, and 2) in the hypothetical event you wished to, it was an onerous situation requiring holdings of six digits, being non-US, and requiring "90-180 days" of processing time.
- fastball 5y agoYou can trade USDT for USD on any of the big exchanges that allow trading for USD.