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Tether is starting to depeg from USD again
- londons_explore 4y agoWhats up with the quantization on that graph? Does the exchange force all buys and sells to be rounded to a 4 sig fig price?
- scrlk 4y agoUSDT minimum tick size is $0.0001 (https://help.ftx.com/hc/en-us/articles/360027668832 https://help.ftx.com/hc/en-us/articles/360027668832)
- imron 4y agoI have no love for tether or even crypto, but please read the y-axis on the graph, then zoom out to all time for some perspective. https://coinmarketcap.com/currencies/tether/?period=1d https://coinmarketcap.com/currencies/tether/?period=1d Perhaps the sky really is falling this time, but I don’t see that from the data.
- ceejayoz 4y agoThis is a good approach. I'm applying it to my Bernie Madoff investments. https://bespokeinvest.typepad.com/.a/6a00d8349edae969e201053686334d970c-400wi https://bespokeinvest.typepad.com/.a/6a00d8349edae969e201053...
- throwaway71271 4y agohttps://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/ and https://coinmarketcap.com/ https://coinmarketcap.com/ shows more holistic view
- Synaesthesia 4y agoIts kind of a big deal since a currency luke this only has two stable points, 0 and 1. Once people start attacking it by eg buying them for $0.97 and exchanging for $1 thrn it might be over for tether. Who's to say tether did not just print that money BTW? We simply don't know.
- capableweb 4y agoThat's simply not true. Tether almost hit $0.9 quite some time ago, and managed to recover. What's to say it's not true today too? I have no love for Tether and love to see it crash and burn. But until it gets close to $0.9 again, I'm sitting back and not enjoying the show, yet.
- Synaesthesia 4y agoI know it managed to recover, I'm not saying that this is definitely it, but it is possible and there is a tipping point.
- luka-birsa 4y agoTLDR: USDT is shady. USDT is not depegging. USDT FUD is a classic bear market move. Whales make a killing swapping USD for USDT and pocketing 5% for zero risk. It feels like we'll just keep repeating the same story of tether depegging, without anyone actually looking at the redeem process and what would it truly mean for USDT to depeg. What you're seeing is USDT-USD slip on an exchange that provides that trading pair. As it is with any other traded asset, if all of a sudden you get this huge demand for USD trading, to the point that the liquidity dries up, of course this will push the price up. Take that graph and zoom out, perhaps looking at 5 year scale. This slip actually happens once or twice a year, depending on the FUD that's on the market. Market is in extreme fear with cataclysmic level events occurring (Celsius and Terra events are close to what happened to banking in 2008 or worse) weekly. Obviously every news will cause increased sell pressure on USDT and eventually arbitration between entities will not occur fast enough. Now let's look at what happened during the last "depegging". Price dropped to .90 cents per dollar and after a while it returned to 1 USD. Look at the circulating supply of tether - in the aftermath of Terra people actually cut 20% of all supply of USDT and converted it into alternative stable coins BUSD (by Paxos/Binance) and USDC (by Coinbase/Circle) being the primary benificiaries of the flows. Now let's look at the "depegging" claims. Tether would need to not honor the promise of USD payout when you send them USDT. BitFinex is the exchange thats behind tether and you can redeem tether for USD. During the height of the last "depegging", you could always send your USDT there and get USD back at ~1:1 ratio (https://trading.bitfinex.com/t/UST:USD?type=exchange https://trading.bitfinex.com/t/UST:USD?type=exchange). While we can talk about the USDT reserves and we can talk about shady/enron level practices and the court trials, we can also say that after 5 years of they have yet to break USDT. They've cut 20% of their circulation without breaking a sweat. USDT will not crash until there is a bigger functioning alternative. All the key players will ensure that; it's game over for crypto otherwise.
- capableweb 4y agoPeople have lost all sense of perspective because of the TerraUSD drama. I remember when Tether was $0.9. Current Tether price is $0.9973. Wake me up when it gets close to $0.9 again.
- headsoup 4y agoAny time during the night ok?
- dpierce9 4y agoLook at area under curve for 2022 compared with 2021.
- rvz 4y agoToo many people looking at a 1 day chart and don't know how to zoom out.
- randomsearch 4y agoETH down 20%, BTC 10%, I see it.
- Waterluvian 4y agoMy house is only a little on fire. Just a tiny little bit.
- nervousvarun 4y agoMore like...my house was on fire before...then fine...then on fire...then fine...then on fire again... Except so far each "then fine" is more fine than the previous fine (speaking about BTC historically).
- madsbuch 4y agoI reckon you wouldn't call the fire-brigade when there is a fire in your wood burning stove?
- steeleduncan 4y agoThis isn't a normal asset, the value of which can fluctuate over time without harm, once tether dips below $0.999 on the open market it becomes profitable to buy on the open market and redeem them directly from Tether. Given that Tether's reserves clearly do not match the totality of all Tethers issued, that means that right now it is profitable to force Tether to burn through their currency reserves, bringing it closer to collapse. Possibly a more accurate title would be Right now it is profitable to help put Tether out of business.
- LatteLazy 4y agoIf people start buying tether for .999 to redeem it, that will push the price back up...
- umeshunni 4y agoOnly as long as there are any buyers. At some point, not at 0.999, but probably at 0.9 and definitely at 0.75, people will lose faith.
- kybernetikos 4y ago"Tether Limited as of 2017 stated that owners of tethers have no contractual right, other legal claims, or guarantee that tethers will or can be redeemed or exchanged for dollars" https://en.wikipedia.org/wiki/Tether_(cryptocurrency) https://en.wikipedia.org/wiki/Tether_(cryptocurrency)
- _0w8t 4y agoPast data pretty much never predict sudden big jumps in value of financial products. Those are fat tailed and one may need literally trillions of data points to infer their probability distribution.
- bidirectional 4y agoThey're not trying to predict the future, just show that this is not an historically significant event.
- fullshark 4y agoLooks like Tether's been about $0.9994 since it initially de-pegged that night. https://imgur.com/a/0v2boPx https://imgur.com/a/0v2boPx Apparently there are transaction fees that can allow it to stay there instead of $1, also the fact that tether doesn't give you the right to redeem for $1, but i still see it as a ticking bomb.
- EVa5I7bHFq9mnYK 4y agoI don't know where coinmarketcap get their quotes, but looking at bitfinex and other major exchanges, USDT stays firmly above 1 USD at all times, except a few minutes today when it dipped to 0.9996.
- prvit 4y agoNo, it’s not. At least not for any meaningful definition of “depeg”.
- gjulianm 4y agoI am not sure I would consider a 0.09% decrease a "depeg", specially considering that Tether oscillates quite a bit, and even "recovered" from a bigger decrease of 2%. I would wait a bit to see if it's just an oscillation or a true depeg.
- londons_explore 4y agoI'm surprised depegging isn't a more sudden event. If I owned some stablecoin and I saw the peg slipping, I would trade everything away from the slipping side, in turn making the slip even worse in a positive feedback loop. I'd probably write logic to do that for me automatically too... And if just a few people did that, you'd expect the peg to hit some threshold point and then slip almost instantly to near zero... Which isn't what has happened here.
- thematrixturtle 4y agoYet. The reason this 0.3% drop is news is that, as we last saw with Luna/TerraUSD, depegging is very fast when it happens, and a lot of people have been forecasting a Tether depeg and consequent crypto carnage for a long time. However, TerraUSD was algorithmic, making it extra fast to collapse, while Tether's backing is much more obscure and its owners have more levers to pull to try to pop it up. Edit: Fixed percentage, math is hard
- deleted 4y ago[deleted]
- throwaway290 4y ago> And if just a few people did that, you'd expect the peg to hit some threshold point and then slip almost instantly to near zero... Which isn't what has happened here. I imagine offering 30% interest on deposits[0] helped? [0] https://news.ycombinator.com/item?id=31384581 https://news.ycombinator.com/item?id=31384581
- marban 4y agoUSDD: https://news.ycombinator.com/item?id=31723473 https://news.ycombinator.com/item?id=31723473
- thematrixturtle 4y agoThis is almost certainly tied to what appears to be Celsius's imminent failure, since earlier today they announced that they're stopping withdrawals: https://news.ycombinator.com/item?id=31720277 https://news.ycombinator.com/item?id=31720277 Tether is known to have lent Celsius at least $1 billion last year: https://www.coindesk.com/business/2021/10/07/tether-has-lent-1b-to-celsius-network-report/ https://www.coindesk.com/business/2021/10/07/tether-has-lent...
- patio11 4y agoReportedly they repaid $500M in May.
- dubswithus 4y agohttps://mobile.twitter.com/patio11/status/1536307404249436160?s=20&t=k3qchcPpbHeEJzQCr3ToxA https://mobile.twitter.com/patio11/status/153630740424943616... It's great that you relish other people losing money. Sort of like how you tried to relish being right about Covid-19 with your hashing scam.
- slpsys 4y agoa friend found this thread last night, which is basically a continuation of the analysis you put on your blog a few months ago about tether's crypto assets having made them insolvent, but looking at the way their foreign exchange problem has also made them insolvent: https://twitter.com/Cryptadamist/status/1536119735053697024 https://twitter.com/Cryptadamist/status/1536119735053697024 you might have seen it already, seeing as you're tagged, but thought it was worth mentioning
- JohnJamesRambo 4y agoThe thing that frustrates me the most about crypto is that we tried to replace the traditional financial system of fractional reserve, predatory lending, excessive leverage and we recreated the entire thing again. I just assume this is a natural tendency for human beings at this point.
- 4y ago
- christophilus 4y agoNo, it isn’t. But TRON is: https://news.ycombinator.com/item?id=31723473 https://news.ycombinator.com/item?id=31723473 Crypto has been interesting to watch from the sidelines this year.
- lmilano 4y agoPretty much in the usual trading range during these volatile times
- encryptluks2 4y agoIn all honesty Tether crashing would probably be the best thing to happen.
- m00dy 4y agoI think we should be looking at Bitfinex for USD/USDT. Ftx has very low trading volume comparing Bitfinex/Binance.
- hestefisk 4y agoLook at CoinMarketCap for aggregate volumes. Seems it’s dropped 0.07% in the last 24 hrs. Not great for a stable coin but hardly a Terra / Luna collapse.
- joosters 4y agoTether skeptic here. This is not a depeg. Most likely this is just because of the current sell-off of crypto currencies - there are a lot more sellers than buyers out there right now. Right now, when you can buy a tether at $0.997 and (in theory) sell it back to tether at $1, there's not much scope for profits after costs. So there's not going to be a lot of money pushing the price back up. IOW it's kind of 'expected' that a stablecoin might drift tiny amounts away from its theoretical peg. It's just not worth it. (n.b. even Tether themselves charge a 0.1% fee to redeem their coins) If/when tether drops below (say) $0.99, and there's no influx of money trying to support it, that's when USDT is in trouble.
- phire 4y agoStable-coins should be drifting slightly-high during mass-selloffs of the more volatile cryptocurrencies, as more people try to get onto stable ground. And if you check the "slightly" more reputable stable coins like USDC, TUSD and BUSD, they are indeed drifting slightly high. But instead Tether is drifting low, quite low. I agree it's not quite a depeg, but it shows that many people distrust Tether and want to get rid of it at times like this.
- troon-lover 4y ago
- steeleduncan 4y agoYes, depegging is an instantaneous event that happens when Tether fail to redeem a Tether at "face value". As long as they continue to do that, the value of Tether on an open market is only relevant in that it expresses the concerns of traders that they will eventually depeg. Obviously as the price drops it becomes increasingly profitable to buy on the open market and sell back to Tether, depleting their fiat reserves and bringing closer the moment when they stop exchanging at face value, and it all ends.
- CGamesPlay 4y agoWhy does tether not “buy back” all of those coins that it would be a loss to redeem? It seems like that would drive up the price and reduce their reserves by less than the alternative.
- mmaunder 4y agoOverall things are shaky this morning. VIX up, euro markets getting pummeled, NASDAQ, S&P and DOW futures plummeting and crypto across the board down by as much as 18% in past 24 hours. Setting up for a rough day.
- jmyeet 4y agoWhen it comes to valuation human psychology will beat mathematical verification every time. Anyone who has paid attention to the human history of money and finance should know this. Is this a big deviation from the peg? No. But is it the first such deviation? No. Did it recover previously? Yes. But the only thing that matters is how deep the reserves are to maintain the peg. That's it. Can that survive the turning tide of confidence in it when it eventually happens? We'll see. But my money is that psychology will win the day. If your financial position depends on the stability of this or any algorithmic stablecoin (or probably any stablecoin) I would strongly advise you to correct that. Depending on a peg is, as Warren Buffett once put it, like picking up pennies in front of a bulldozer. Low reward and low reward but the downside is very, very large.
- nly 4y agoIs such a tiny drift really a "depeg"? Even pegged securities need market liquidity and have market makers seeking profit.
- mudrockbestgirl 4y agoUnfortunately that's not a depeg but I really wish it would. It'd be nice to flush the scam out of the ecosystem.
- brandoncarl 4y agoTether's underlying assets are almost certainly worth less than $1. You can see this by taking each asset class and marking it to market. I've provided details here: https://twitter.com/brandonjcarl/status/1536310742261047296?s=20&t=CpuYA59cUzyEGtUcjFoNcw https://twitter.com/brandonjcarl/status/1536310742261047296?... By itself that's not enough for Tether to "fail". It does mean that the asset is in a position of very high risk and subject to a run.
- dd36 4y agoIt’s bizarre that this is legal. It’s all based on “trust us” without qualified audits or verifications.
- lxgr 4y agoIn the absence of an explicit regulatory framework, legality can probably only be determined after negative outcomes, unfortunately. It also seems like without catastrophic retail investment losses, politically there isn‘t much to gain with implementing such a regulation, and potentially much to lose. Reacting too late to prevent harm seems to be the logical outcome.
- chii 4y agowell, if people decided to trust them even without the audit, then what's to say that it should be illegal? Investments have always been caveat emptor.
- brandoncarl 4y agoInvestments were this way in the 1800s and early 1900s. A lot of protections have been put into place since then. There's a reason we prosecute Ponzi schemes, offer FDIC and SIPC insurance, stress test banks, etc.
- potatototoo99 4y agoLike every currency ever in the history of mankind, gold-backed or not.
- mmaunder 4y agoWith what looks like a global stock market crash in the works this morning, it’s going to be tough to maintain that peg with a run on crypto withdrawals. Bit of a perfect storm unfortunately.
- deleted 4y ago[deleted]
- arisAlexis 4y agoNo it's not... there has been rumors about Tether since 2015. Edit for down voters: it's still not de-pegged, sorry to disappoint with facts.
- Jamie9912 4y agoThis is fear mongering, this is not a depeg
- traveler01 4y agoThere's no depeg, the market it's just stressed and probably some people are just selling it bellow price while panicking.
- kosyblysk666 4y agotulips,,,fresh tulips,,,one dollar only,,,tulips...
- Night_Thastus 4y agoAll of crypto is collapsing, because people have finally caught on that they're all scams and schemes. There's nothing of any value there and never was. When that happens, it's impossible to get the "to the moon" (bigger fool scams) BS rolling. Thank goodness. Every time I hear about another one falling apart, it's a joy. I have sympathy for people who got involved, just like those who got involved in an MLM. But there is a limit to that.
- gus_massa 4y agoI see a lot of tiny transactions of $0.001 at $0.9983. One every few seconds. See https://imgur.com/a/SQOJbyl https://imgur.com/a/SQOJbyl Does anyone know why?
- outside1234 4y agoOf course it is. This is not a stable situation - it eventually going to crash like the rest.