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I 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/cu
by imron 4y ago
I 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.
- unknown_apostle 4y agoNow let's look at market cap. Redemption is no longer "looked at" but in progress.
- imron 4y agoHow it a bigger deal than any of the significantly larger and longer drops that have happened in tether’s history?
- donkeyd 4y agoLarger drops have had clear news about Tether to blame for the drop. From what I can tell, this one is more natural and caused by turmoil in crypto markets themselves. That's what makes this interesting to me. Edit: Apparently there's some news: https://news.ycombinator.com/item?id=31723878 https://news.ycombinator.com/item?id=31723878
- prvit 4y ago> Once people start attacking it by eg buying them for $0.97 and exchanging for $1 thrn it might be over for tether. Or, alternatively, Tether is printing money every time someone posts a sell order for USDT at less than $1. At 0.97 that would be an immediate 3% profit for each USDT they buy.
- spywaregorilla 4y agoIf and only if they buy it and can sell it at again for $1.
- paulgb 4y agoIt would still be a profit in the accounting sense. They could erase a $1 liability at a cost of $0.97.
- spywaregorilla 4y agoYou're assuming they track tether as a liability. I doubt it, as they have no contractual obligation to redeem them.
- paulgb 4y agoTheir transparency page counts issued coins as liabilities: https://tether.to/en/transparency/ https://tether.to/en/transparency/
- spywaregorilla 4y agoTheir transparency page also states they have 1:1 asset backings which is a lie so oh well. This page is irrelevant. They are not obligated to redeem your tokens. They're not liabilities. They may pretend they are, but they're not, and if the money stops flowing, they can leave with all the remaining money in the bank laughing at their idiot customers.
- 4y ago
- solumunus 4y ago> Once people start attacking it by eg buying them for $0.97 and exchanging for $1 thrn it might be over for tether. Am I missing something? That's literally how stablecoins are supposed to work. Arbitrage creates demand which maintains price.
- mhluongo 4y agoIf a stablecoin allows redemptions, and it isn't completely backed, everyone trying to redeem at once can lead to a bank run and spiral as no one wants to be the last holder. The hope, of course, is that it is completely backed. It's also quite hard / expensive to redeem Tether, I've heard. For arb, I think the trade here is: can I buy USDT and redeem fast enough that I make a low-risk spread, or am I further exposing my funds to risk over that redemption period? Versus selling USDT for USDC, for example, which I can do immediately if I trust USDC. I imagine the latter is what's happening on-chain. EDIT: Clarified my lazy language around low-risk arb versus peg speculation.
- lottin 4y agoThe arbitrageurs buy USDT at a discount and redeem it, pocketing the difference. This creates a buying pressure, that tends to bring the price back up to $1. Buying USDT and hoping that it repegs is not arbitrage. If tether fails to redeem USDT arbitrage will stop and nothing will prevent USDT from falling more.
- solumunus 4y ago> I think you've got it backwards. The arb would be people buying it at $0.97 and hoping it repegs to $1, not redeeming That's not an arb, that's just buying low and selling high at a later date. The arb is buying something for $0.97 but then getting $1 back, minus fees. The more people doing that the closer the peg stays to $1 through supply/demand. That's the whole basis of how a peg is maintained, arbitrage players provide huge amounts of liquidity and make small margins for doing so.
- mhluongo 4y ago
- tiku 4y agothey have reports on their site by external parties that check their funds. anyway they have a lot of bonds etc. we don't care when banks only have 50% of their client's money but we do when it's tether for some reason.
- surfmike 4y agoThat’s because of FDIC. Nothing will save you if tether peg fails.
- greenthrow 4y agoThis is an extremely disingenuous argument on so many levels. 1) Banks don't run their own currencies. 2) Banks don't claim to have a dollar on hand for every dollar in account balances at all times. 3) Banks are FDIC insured. Even if the bank collapses, you will get your money back. Crypto bros, it's time to stop defending Tether. It will collapse and you will look just as foolish as the people who backed Luna and Safemoon and all the other scams.
- beojan 4y ago> 1) Banks don't run their own currencies. Some do, namely the Scottish and Northern Irish note issuing banks. These have to be fully backed though. https://www.bankofengland.co.uk/banknotes/scottish-and-northern-ireland-banknotes https://www.bankofengland.co.uk/banknotes/scottish-and-north...
- deleted 4y ago[deleted]
- beefield 4y agoIf the value of assets of a bank drops under certain limits [1], regulators can and will take action. To be clear, every single bank that is currently alive (and regulated by relevant western authorities) has assets way more than what the deposits are worth. They may not be liquid assets, but they are there. [1] you may want to search for terms like "regulatory capital" or "capital adequacy"
- deleted 4y ago[deleted]
- FabHK 4y agoAs Hemingway memorably said: "Gradually, then suddenly." https://quoteinvestigator.com/2018/08/06/bankrupt/ https://quoteinvestigator.com/2018/08/06/bankrupt/
- 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.