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> whenever the price of Tethers drops to $0.99 If the Tether is pegged to the USD, who would ever sell one for $0.99?

by MockObject 4y ago

flerchin 4y ago
Folks who want their fiat.
- MockObject 4y ago
  What does "pegged" even mean unless Tether is always willing to pay 1 USD for one? Then who would sell their tether for $0.99, at a loss?
  - oneoff786 4y ago
    Tether is not willing to do this
    - MockObject 4y ago
      So their idea of pegging is just a forcefully worded request?
      - oneoff786 4y ago
        More of a vague promise to buy. They have a lot of dollars. If tether skips to 99 cents will they buy it from people to push the price up? Maybe. It’s been sitting at 99.9 for several days now.
      - lmm 4y ago
        "Sure, it's pegged, Anyone who fills in the right forms can get their USD back. After a few weeks. And if the request is big enough. Oh, but there was a problem with your form. Sorry. Try correcting it and resubmitting it. No, we can't tell you what the problem was."
  - ohgodplsno 4y ago
    Those who bought it at 0.9999954 and resell it at 0.9999978, making less than pennies on the dollar, but still profit. Then you make a chain of suckers until it goes back to 1USD
  - jallen_dot_dev 4y ago
    Tether will only redeem amounts of $100k or more. The vast majority of people get out of USDT by selling it on the market. Depending on how many people want to sell, how quickly they want to, and how many market makers are willing/able to arb it back up to $1.00, you might just take $0.99 instead.
  - thehappypm 4y ago
    This is exactly what keeps it at $1. If someone is willing to sell at $.99 then the number of buyers is gigantic. Ditto with someone buying at $1.01. That’s why it’s news when the peg drops by more than a fraction at a penny. As for why would someone buy or sell for other than $1.00? Plenty of reasons, if a market opportunity to make 10% in a crypto investment pops up, damn right people will liquidate tether at a slight loss
jermaustin1 4y ago
Anyone unable to sell for $1.00 because no one is buying at $1.00.
oneoff786 4y ago
Because $0.99 is better than $0. Pegged is a meaningless term if nobody is supporting the peg.
ineptech 4y ago
It's my understanding that the people behind Tether buy at some price slightly below a dollar, to allow some "play" (slight volatility) in the Tether market and to incentivize others to hold Tethers and provide liquidity in exchange for arbitrage. But since you bring it up, I don't know if that's true, I could be misremembering that. I don't think it's super important to my question though.
jcpham2 4y ago
I think it would be super helpful if some of ya'll were to watch the USDT:BTC (edit: really any USDT currency pair) order books on the exchanges on different intervals and watch the market making bots in action - this is what I think. See the spreads, see the intervals they make their trades on - study it.

> whenever the price of Tethers drops to $0.99 If the Tether is pegged to the USD, who would ever sell one for $0.99?

flerchin 4y ago

Folks who want their fiat.

MockObject 4y ago
What does "pegged" even mean unless Tether is always willing to pay 1 USD for one? Then who would sell their tether for $0.99, at a loss?
- oneoff786 4y ago
  Tether is not willing to do this
  - MockObject 4y ago
    So their idea of pegging is just a forcefully worded request?
    - oneoff786 4y ago
      More of a vague promise to buy. They have a lot of dollars. If tether skips to 99 cents will they buy it from people to push the price up? Maybe. It’s been sitting at 99.9 for several days now.
    - lmm 4y ago
      "Sure, it's pegged, Anyone who fills in the right forms can get their USD back. After a few weeks. And if the request is big enough. Oh, but there was a problem with your form. Sorry. Try correcting it and resubmitting it. No, we can't tell you what the problem was."
- ohgodplsno 4y ago
  Those who bought it at 0.9999954 and resell it at 0.9999978, making less than pennies on the dollar, but still profit. Then you make a chain of suckers until it goes back to 1USD
- jallen_dot_dev 4y ago
  Tether will only redeem amounts of $100k or more. The vast majority of people get out of USDT by selling it on the market. Depending on how many people want to sell, how quickly they want to, and how many market makers are willing/able to arb it back up to $1.00, you might just take $0.99 instead.
- thehappypm 4y ago
  This is exactly what keeps it at $1. If someone is willing to sell at $.99 then the number of buyers is gigantic. Ditto with someone buying at $1.01. That’s why it’s news when the peg drops by more than a fraction at a penny. As for why would someone buy or sell for other than $1.00? Plenty of reasons, if a market opportunity to make 10% in a crypto investment pops up, damn right people will liquidate tether at a slight loss

jermaustin1 4y ago

Anyone unable to sell for $1.00 because no one is buying at $1.00.

oneoff786 4y ago

Because $0.99 is better than $0. Pegged is a meaningless term if nobody is supporting the peg.

ineptech 4y ago

It's my understanding that the people behind Tether buy at some price slightly below a dollar, to allow some "play" (slight volatility) in the Tether market and to incentivize others to hold Tethers and provide liquidity in exchange for arbitrage. But since you bring it up, I don't know if that's true, I could be misremembering that. I don't think it's super important to my question though.

jcpham2 4y ago

I think it would be super helpful if some of ya'll were to watch the USDT:BTC (edit: really any USDT currency pair) order books on the exchanges on different intervals and watch the market making bots in action - this is what I think. See the spreads, see the intervals they make their trades on - study it.