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Reduces pressure to withdraw USDT for fiat on exchanges. Tether has to support those pegs or they break. Same difference
by graeme 5y ago
Reduces pressure to withdraw USDT for fiat on exchanges. Tether has to support those pegs or they break. Same difference
- spywaregorilla 5y agoDo they? Genuine question. How much does bitfinex support the price at $1 on exchanges?
- graeme 5y agoI’m not sure if they do, but if there was sell pressure they would have to or peg would break. Possible there is not sufficient sell pressure at moment. When you sell USDT for USD on exchange, someone is providing that dollar. If no private market participant willing, then peg slips. You would expect fiat withdrawals in downturns and peg slippage absent support.
- sbierwagen 5y ago>How much does bitfinex support the price at $1 on exchanges? An open question. Several attorneys general have ongoing investigations regarding the tether peg. A really grim and cynical person might make the case that exchanges want something like tether to exist, and are incentivized to fudge the public-facing numbers regarding tether trade volume and its order book.
- _3u10 5y agoAsk the Bank of England about their desire to maintain Breton Woods
- spywaregorilla 5y agoI think what you're saying here is that if there was a run on tether, bitfinex might stop supporting it. And sure, I think that's probably true. But I'm asking how much of a role do they play in actively supporting it day to day. Are they the principle buyer of the currency when people want to liquidate? Or is it other people?
- sbierwagen 5y agoIf you asked Bernie Madoff on December 10th 2008 how well his investment fund was doing, he would say "Excellent, thank you." The set of people who have inside information on how tether functions and the set of people who would actually tell the truth about it are entirely disjoint.
- onlyrealcuzzo 5y agoTheoretically, what is stopping BitFinex from supporting the peg predominately on BitFinex and letting arbitrage traders take care of the rest?
- Bombthecat 5y agoKraken.com smelled the bad fish years ago. They made tether a normal exchange rate. If there is a "rush out of the door". The value would just drop :)