3 ms·

Is there an over/under on when the same thing happens (as I believe it inevitably will) to Tether?

by btilly 4y ago

shawabawa3 4y ago
The "same" thing cannot happen to Tether A different but similar thing can happen. There's no death spiral mechanism in Tether. Either you can redeem it for $1 (for a limited definition of "you", their redemption requirements are nuts), or you can't Tether breaking the peg would look different, with the peg slowly dropping over weeks or months as people got less and less confident in Tether's reserves
- chalst 4y ago
  It's true that USDT is not an algorithmic stablecoin, so it's different. Market sentiment, though, tends to change quite quickly: I would not expect a collapse, if and when it happens, to take weeks. It's not that different. There's also little reason to have confidence in Tether's reserves: Tether have refused to have traditional accounts produced, and they are known to have lied about the nature of the reserves, having initially claimed to be 100% backed by cash, but due to a leak we know the reserves include debts. Debts generally are illiquid, and you need highly liquid assets to defend a peg.
graeme 4y ago
Their peg is still off and they’re redeeming. They may survive but they’re clearly struggling in a way they haven’t for a long while
- Grimburger 4y ago
  > they’re clearly struggling Currently at $0.999 USD. Is that really your definition of struggling? https://trade.kraken.com/charts/KRAKEN:USDT-USD https://trade.kraken.com/charts/KRAKEN:USDT-USD
  - AlexandrB 4y ago
    It's been like that since the short depeg on May 12. Why isn't it returning to "normal" (1.00)?
  - graeme 4y ago
    Yes? They are consistently below their peg and shedding market cap rapidly. The combination of these two suggests they’re seeing lots of selling and keeping peg up only by spending reserves. Except….they haven’t got it back to $1 They could easily do this if there wasn’t sell pressure. You can also check the Curve 3 pool. It’s missing about $2 billion in capital, the stablecoins ought to be near equal https://curve.fi/3pool https://curve.fi/3pool
- deleted 4y ago
  [deleted]

Is there an over/under on when the same thing happens (as I believe it inevitably will) to Tether?

by btilly 4y ago

Is there an over/under on when the same thing happens (as I believe it inevitably will) to Tether?

The "same" thing cannot happen to Tether A different but similar thing can happen. There's no death spiral mechanism in Tether. Either you can redeem it for $1 (for a limited definition of "you", their redemption requirements are nuts), or you can't Tether breaking the peg would look different, with the peg slowly dropping over weeks or months as people got less and less confident in Tether's reserves

chalst 4y ago
It's true that USDT is not an algorithmic stablecoin, so it's different. Market sentiment, though, tends to change quite quickly: I would not expect a collapse, if and when it happens, to take weeks. It's not that different. There's also little reason to have confidence in Tether's reserves: Tether have refused to have traditional accounts produced, and they are known to have lied about the nature of the reserves, having initially claimed to be 100% backed by cash, but due to a leak we know the reserves include debts. Debts generally are illiquid, and you need highly liquid assets to defend a peg.

graeme 4y ago

Their peg is still off and they’re redeeming. They may survive but they’re clearly struggling in a way they haven’t for a long while

Grimburger 4y ago
> they’re clearly struggling Currently at $0.999 USD. Is that really your definition of struggling? https://trade.kraken.com/charts/KRAKEN:USDT-USD https://trade.kraken.com/charts/KRAKEN:USDT-USD
- AlexandrB 4y ago
  It's been like that since the short depeg on May 12. Why isn't it returning to "normal" (1.00)?
- graeme 4y ago
  Yes? They are consistently below their peg and shedding market cap rapidly. The combination of these two suggests they’re seeing lots of selling and keeping peg up only by spending reserves. Except….they haven’t got it back to $1 They could easily do this if there wasn’t sell pressure. You can also check the Curve 3 pool. It’s missing about $2 billion in capital, the stablecoins ought to be near equal https://curve.fi/3pool https://curve.fi/3pool
deleted 4y ago
[deleted]