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Tether has a $60bn market cap. That's a drop in the ocean for the international markets.
by csomar 5y ago
Tether has a $60bn market cap. That's a drop in the ocean for the international markets.
- graeme 5y agoLehman was quite small by the time it collapsed. Doesn’t mean Tether will have a ripple effect but you’re ignoring leverage.
- paulgb 5y agoFor something more recent, Archegos was a $10bn fund and something close to $200bn in asset devaluation was associated with its collapse.
- JumpCrisscross 5y ago> Tether has a $60bn market cap. That's a drop in the ocean for the international markets. Market cap here is more meaningless than usual as we don't care about Tether's liabilities but its assets. (Given their history, there is no reason to assume one strictly relates to the other.) If Tether has its $60bn in short-dated Treasuries, great, no problem. If they have $5bn in receivables financing to a homebuilder, fast liquidation could very well crater that market. While that happens, other holders could be forced to sell, thereby transmitting risk from crypto to the mainline. This happened when several money market funds "broke the buck" in '08, and led to a flurry of reforms that effectively banned maturity transformation in fund products. (Less jargon: you can't promise fixed-price redemption if you're buying securities.)