8 ms·

The high buy volume at $0.98 is due to arbitrage. This is to be expected before the final crash. People are using the opportunity to net an instant 2% return.

The high buy volume at $0.98 is due to arbitrage. This is to be expected before the final crash. People are using the opportunity to net an instant 2% return. Buy $10M USDT at $0.98, redeem at Tether for $1, take home $200K of profit instantly. Thing is, this will only last until Tether runs out of liquidity. Then all bets are off.

outsomnia 4y ago
If I understand it, this is similar to the UK / ERM 1992 "Black Wednesday" https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday There were more people wanting to sell the pound for Euros at the rate mandated by the ERM than resources the UK had to maintain the arbitrary exchange rate and "it did not end well".
thematrixturtle 4y ago
That's a classic Taleb distribution, aka "picking up pennies in front of a steamroller". https://en.wikipedia.org/wiki/Taleb_distribution https://en.wikipedia.org/wiki/Taleb_distribution
pjc50 4y ago
> redeem at Tether for $1 Is the redemption window really open? That's something people have been extremely skeptical of.
- rwmj 4y ago
  Apparently you have to bring a minimum of $100K of USDT to get it redeemed into real money. I would say this is an incredibly stupid trade to try because you're relying on Tether actually paying out as promised.
  - blackoil 4y ago
    For large players it is 2% instant return, and they just have to be early enough before Tether drops the ball.
    - pjc50 4y ago
      The question which has to be asked here is: what do Tether's open market operations look like? Since they're roleplaying "be your own Federal reserve", they shouldn't have to transact at par against people who bought at a discount, they should be hoovering it up directly from the open market at a smaller margin.
      - lupire 4y ago
        That's the point. They can't buy open market because they are insolvent.
  - jiggawatts 4y ago
    Statements like this blow my mind. The entire point of Tether is that you can absolutely trust them with $100K, $1M, $10M, or whatever. It's backed, it's robust, it's tethered, and they guarantee payout. The promise is essentially the AAA security of the crypto world, the equivalent to US Treasury bonds or whatever. Meanwhile, the sentiment I keep hearing is yours: "You'd have to be absolutely nuts to trust these guys!" Which is not only diametrically opposed to the picture Tether is trying to paint, but it's saying that AAA is actually a CCC− and hence that there is nothing in the crypto world that's above, oh, I dunno, B- or thereabouts. But the entire point of Tether hinges on it being perceived as AAA. Take for example the US dollar treasury bonds. Even countries and people opposed to the United States and everything it stands for agree that it is AAA. People that hate the US agree that the USD is a stable currency and their bonds are secure. Literal enemies, legally at war will prefer to use USD over their own currency for many transactions! Meanwhile it's hard to find anyone that hasn't apparently drunk crypto Kool-Aid that thinks Tether is anything but a trash fire. It's just so bizarre...
    - pjc50 4y ago
      > it's saying that AAA is actually a CCC− Strongly analogous to the eurobond crisis, and the mortgage tranche issue; there was a period in 2008/9 where all sorts of things were downgraded overnight. > Take for example the US dollar treasury bonds. Even countries and people opposed to the United States and everything it stands for agree that it is AAA. People that hate the US agree that the USD is a stable currency and their bonds are secure. Literal enemies, legally at war will prefer to use USD over their own currency for many transactions! Yes - and this is why Americans panicking about financial mismanagement always come across as so out of touch. USD is the currency everyone else runs to for safety.
    - WA 4y ago
      It’s perceived as AAA until it’s not. Easy as that. Like WireCard that was a "good business", which turned out to be a fraud and the stock price crashing 70% in one day and 99% within a week. So what is your point actually?
    - vkou 4y ago
      > But the entire point of Tether hinges on it being perceived as AAA. No, the entire point of Tether hinges on everyone pretending that it's AAA, and just letting the Tether money printer lift all crypto boats. Anyone paying attention knows its a fraud, but are happy to look the other way, because it's the reason BTC is $30K, instead of $600 right now. Sure, they'll lose whatever they have invested at the moment when the house of cards collapses, but if you can't predict when the music will stop, the smart move today is to keep playing.
  - rewiz 4y ago
    i dont know any individual who has ever redeemed
  - px43 4y ago
    What people here don't seem to understand is that the people who actually hold significant amounts of Tether basically all know each other. It really is more of a social contract than anything else. It was an early stablecoin, and it only exists so major exchanges could interoperate without having to rely on banks. This is what killed MtGox, their over-reliance on banks to hold the collateral needed to make them solvent. Carl Mark Force IV was a DEA agent who was basically blackmailing MagicalTux, forcing him to invest in fake crypto projects, and if he didn't play along, Karl would use his DEA powers to freeze MtGox's bank accounts. This prevented people from cashing out, which was a problem. Major exchanges learned that touching actual US dollars in bank accounts is poison, and something that major exchanges can't really do without devoting massive (crippling amounts) of resources to legal and compliance teams. Better stablecoins exist now, from a US regulatory standpoint (USDC) and from an algorithmic pegging standpoint (DAI), but the people who run exchanges still like using Tether between themselves for historical reasons, which is fine. I will never hold Tether, and probably every person who reads this should never hold Tether, but not because it's necessarily bad, but because it's not for you. It has a very specific utility to certain crowds, and IMO that's fine.
- redisman 4y ago
  They do it through exchanges. But what happens there is almost certainly just internal bookkeeping
quickthrower2 4y ago
“redeem at Tether” Ok I have a bridge…
adastra22 4y ago
> redeem at Tether Find me one person that has ever done this. Just one. I will wait.
- shawabawa3 4y ago
  Not with tether directly but I think bitfinex lets you convert usdt to usd and withdraw to a bank account (until it doesn't)
- dannyw 4y ago
  I've done this for years via Bitfinex. Occasionally the wires are a couple days late but never any issues.
  - AlexandrB 4y ago
    Were you redeeming at Tether, or were you redeeming at Bitfinex and they were selling the Tether on the open market to someone else and sending you the proceeds? I think what the OP is saying is that there is not a reliable account of someone going to Tether with 100k USDT and having Tether give them $100k USD.
  - spiderice 4y ago
    Isn’t redeeming at Bitfinix not the same as redeeming at Tether? I don’t think what you do is what GP is looking for

outsomnia 4y ago

If I understand it, this is similar to the UK / ERM 1992 "Black Wednesday" https://en.wikipedia.org/wiki/Black_Wednesday https://en.wikipedia.org/wiki/Black_Wednesday There were more people wanting to sell the pound for Euros at the rate mandated by the ERM than resources the UK had to maintain the arbitrary exchange rate and "it did not end well".

thematrixturtle 4y ago

That's a classic Taleb distribution, aka "picking up pennies in front of a steamroller". https://en.wikipedia.org/wiki/Taleb_distribution https://en.wikipedia.org/wiki/Taleb_distribution

pjc50 4y ago

> redeem at Tether for $1 Is the redemption window really open? That's something people have been extremely skeptical of.

rwmj 4y ago
Apparently you have to bring a minimum of $100K of USDT to get it redeemed into real money. I would say this is an incredibly stupid trade to try because you're relying on Tether actually paying out as promised.
- blackoil 4y ago
  For large players it is 2% instant return, and they just have to be early enough before Tether drops the ball.
  - pjc50 4y ago
    The question which has to be asked here is: what do Tether's open market operations look like? Since they're roleplaying "be your own Federal reserve", they shouldn't have to transact at par against people who bought at a discount, they should be hoovering it up directly from the open market at a smaller margin.
    - lupire 4y ago
      That's the point. They can't buy open market because they are insolvent.
- jiggawatts 4y ago
  Statements like this blow my mind. The entire point of Tether is that you can absolutely trust them with $100K, $1M, $10M, or whatever. It's backed, it's robust, it's tethered, and they guarantee payout. The promise is essentially the AAA security of the crypto world, the equivalent to US Treasury bonds or whatever. Meanwhile, the sentiment I keep hearing is yours: "You'd have to be absolutely nuts to trust these guys!" Which is not only diametrically opposed to the picture Tether is trying to paint, but it's saying that AAA is actually a CCC− and hence that there is nothing in the crypto world that's above, oh, I dunno, B- or thereabouts. But the entire point of Tether hinges on it being perceived as AAA. Take for example the US dollar treasury bonds. Even countries and people opposed to the United States and everything it stands for agree that it is AAA. People that hate the US agree that the USD is a stable currency and their bonds are secure. Literal enemies, legally at war will prefer to use USD over their own currency for many transactions! Meanwhile it's hard to find anyone that hasn't apparently drunk crypto Kool-Aid that thinks Tether is anything but a trash fire. It's just so bizarre...
  - pjc50 4y ago
    > it's saying that AAA is actually a CCC− Strongly analogous to the eurobond crisis, and the mortgage tranche issue; there was a period in 2008/9 where all sorts of things were downgraded overnight. > Take for example the US dollar treasury bonds. Even countries and people opposed to the United States and everything it stands for agree that it is AAA. People that hate the US agree that the USD is a stable currency and their bonds are secure. Literal enemies, legally at war will prefer to use USD over their own currency for many transactions! Yes - and this is why Americans panicking about financial mismanagement always come across as so out of touch. USD is the currency everyone else runs to for safety.
  - WA 4y ago
    It’s perceived as AAA until it’s not. Easy as that. Like WireCard that was a "good business", which turned out to be a fraud and the stock price crashing 70% in one day and 99% within a week. So what is your point actually?
  - vkou 4y ago
    > But the entire point of Tether hinges on it being perceived as AAA. No, the entire point of Tether hinges on everyone pretending that it's AAA, and just letting the Tether money printer lift all crypto boats. Anyone paying attention knows its a fraud, but are happy to look the other way, because it's the reason BTC is $30K, instead of $600 right now. Sure, they'll lose whatever they have invested at the moment when the house of cards collapses, but if you can't predict when the music will stop, the smart move today is to keep playing.
- rewiz 4y ago
  i dont know any individual who has ever redeemed
- px43 4y ago
  What people here don't seem to understand is that the people who actually hold significant amounts of Tether basically all know each other. It really is more of a social contract than anything else. It was an early stablecoin, and it only exists so major exchanges could interoperate without having to rely on banks. This is what killed MtGox, their over-reliance on banks to hold the collateral needed to make them solvent. Carl Mark Force IV was a DEA agent who was basically blackmailing MagicalTux, forcing him to invest in fake crypto projects, and if he didn't play along, Karl would use his DEA powers to freeze MtGox's bank accounts. This prevented people from cashing out, which was a problem. Major exchanges learned that touching actual US dollars in bank accounts is poison, and something that major exchanges can't really do without devoting massive (crippling amounts) of resources to legal and compliance teams. Better stablecoins exist now, from a US regulatory standpoint (USDC) and from an algorithmic pegging standpoint (DAI), but the people who run exchanges still like using Tether between themselves for historical reasons, which is fine. I will never hold Tether, and probably every person who reads this should never hold Tether, but not because it's necessarily bad, but because it's not for you. It has a very specific utility to certain crowds, and IMO that's fine.
redisman 4y ago
They do it through exchanges. But what happens there is almost certainly just internal bookkeeping

quickthrower2 4y ago

“redeem at Tether” Ok I have a bridge…

adastra22 4y ago

> redeem at Tether Find me one person that has ever done this. Just one. I will wait.

shawabawa3 4y ago
Not with tether directly but I think bitfinex lets you convert usdt to usd and withdraw to a bank account (until it doesn't)
dannyw 4y ago
I've done this for years via Bitfinex. Occasionally the wires are a couple days late but never any issues.
- AlexandrB 4y ago
  Were you redeeming at Tether, or were you redeeming at Bitfinex and they were selling the Tether on the open market to someone else and sending you the proceeds? I think what the OP is saying is that there is not a reliable account of someone going to Tether with 100k USDT and having Tether give them $100k USD.
- spiderice 4y ago
  Isn’t redeeming at Bitfinix not the same as redeeming at Tether? I don’t think what you do is what GP is looking for