5 ms·

I guess people are withdrawing USDT to USD on bitfinex, so bitfinex needs to redeem USDT? Is there another obvious explanation I’m missing?

SilasX 4y ago
I don’t know if these figures are typical, but if not, they could, in turn, mean there’s unusually high demand to turn USDT into “real”(er) dollars, which would indicate collapsing faith in Tether. FWIW, on Thursday I saw Tether (USDT) following the same pattern as TerraUSD: a small but persistent discount agains the dollar. I then sold/closed all my Tether longs. Not investment advice, DYOR.
- duskwuff 4y ago
  You missed a more significant movement -- between Wednesday and Thursday, Tether exchange rates were unstable for a period of 24-36 hours, and briefly dropped to near $0.95 USD/USDT. Exchange rates have mostly recovered since then, but remain nontrivially lower than they were a week ago.
  - SilasX 4y ago
    I saw it, I’m just think there’s a lot more evidential value in a persistent discount than very brief crashes that recover. The discount had been going on for several days by that point (not having hit parity in that time).
- SturgeonsLaw 4y ago
  > closed all my Tether longs I've been wondering, what's the downside with Tether shorts? If it remains stable, then the shorts don't move in value. USDT is unlikely to moon above $1.00. If it collapses then the shorts print money. All you pay is the fees associated with creating and maintaining the positions. Seems like it's all upside. I'm assuming there's some counterparty risk with exchanges blocking trading of synthetic derivatives if the underlying asset is imploding?
  - NhanH 4y ago
    It’s mostly just counterparty risk but in a different way than what you described: if usdt implodes, then the exchanges goes down with it and you can’t withdraw your usd. You have to construct your position in such a way that your fiat money is outside of the crypto exchange.
    - SilasX 4y ago
      Six months later and people still neglect the existence of decentralized exchanges![1] On Compound, they have a frustratingly big collateral buffer, and have built up reserves over time from past liquidations, so it’s really hard not to get your collateral back. (Caveat: To be sure, there could be a latent smartcontract vulnerability here.) As in the thread, it is much harder to get a flash rally on decentralized exchanges, since you’d have to keep it up for enough blocks to trigger the Oracle. If I were going to (further) short Tether, I would convert a bunch of USD to USDC and deposit it on Compound, then borrow ~65% of it back as Tether, which I would immediately convert to USDC then USD to invest more safely. You could also put some of than back into Compound to increase your USDC collateral buffer. [1] https://news.ycombinator.com/item?id=28792712 https://news.ycombinator.com/item?id=28792712
nly 4y ago
That makes no sense. Exchange is a zero sum game. Anyone selling USDT on Bitfinex (the exchange) for USD is just swapping assets with someone else doing the opposite. The exchange itself wouldn't accumulate Tether as a result of this trade action... unless they're playing market maker on their own exchange? It only makes sense if Tether (the organisation) is itself buying back USDT on Bitfinex to support the price (in which case the Tether would be withdrawing back to their Treasury) Of course I realise that Bitfinex and Tether are entwined, and it proves nothing about their asset store.
- thebean11 4y ago
  I believe bitfinex treats USDT as USD meaning if you deposit dollars via a bank account you receive USDT and vice versa

SilasX 4y ago

I don’t know if these figures are typical, but if not, they could, in turn, mean there’s unusually high demand to turn USDT into “real”(er) dollars, which would indicate collapsing faith in Tether. FWIW, on Thursday I saw Tether (USDT) following the same pattern as TerraUSD: a small but persistent discount agains the dollar. I then sold/closed all my Tether longs. Not investment advice, DYOR.

duskwuff 4y ago
You missed a more significant movement -- between Wednesday and Thursday, Tether exchange rates were unstable for a period of 24-36 hours, and briefly dropped to near $0.95 USD/USDT. Exchange rates have mostly recovered since then, but remain nontrivially lower than they were a week ago.
- SilasX 4y ago
  I saw it, I’m just think there’s a lot more evidential value in a persistent discount than very brief crashes that recover. The discount had been going on for several days by that point (not having hit parity in that time).
SturgeonsLaw 4y ago
> closed all my Tether longs I've been wondering, what's the downside with Tether shorts? If it remains stable, then the shorts don't move in value. USDT is unlikely to moon above $1.00. If it collapses then the shorts print money. All you pay is the fees associated with creating and maintaining the positions. Seems like it's all upside. I'm assuming there's some counterparty risk with exchanges blocking trading of synthetic derivatives if the underlying asset is imploding?
- NhanH 4y ago
  It’s mostly just counterparty risk but in a different way than what you described: if usdt implodes, then the exchanges goes down with it and you can’t withdraw your usd. You have to construct your position in such a way that your fiat money is outside of the crypto exchange.
  - SilasX 4y ago
    Six months later and people still neglect the existence of decentralized exchanges![1] On Compound, they have a frustratingly big collateral buffer, and have built up reserves over time from past liquidations, so it’s really hard not to get your collateral back. (Caveat: To be sure, there could be a latent smartcontract vulnerability here.) As in the thread, it is much harder to get a flash rally on decentralized exchanges, since you’d have to keep it up for enough blocks to trigger the Oracle. If I were going to (further) short Tether, I would convert a bunch of USD to USDC and deposit it on Compound, then borrow ~65% of it back as Tether, which I would immediately convert to USDC then USD to invest more safely. You could also put some of than back into Compound to increase your USDC collateral buffer. [1] https://news.ycombinator.com/item?id=28792712 https://news.ycombinator.com/item?id=28792712

nly 4y ago

That makes no sense. Exchange is a zero sum game. Anyone selling USDT on Bitfinex (the exchange) for USD is just swapping assets with someone else doing the opposite. The exchange itself wouldn't accumulate Tether as a result of this trade action... unless they're playing market maker on their own exchange? It only makes sense if Tether (the organisation) is itself buying back USDT on Bitfinex to support the price (in which case the Tether would be withdrawing back to their Treasury) Of course I realise that Bitfinex and Tether are entwined, and it proves nothing about their asset store.

thebean11 4y ago
I believe bitfinex treats USDT as USD meaning if you deposit dollars via a bank account you receive USDT and vice versa