4 ms·
Yes, 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 Tet
by steeleduncan 4y ago
Yes, 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.
- kylecordes 4y agoThey probably can't move big money into the exchanges fast enough to keep up. Possibly quite a lot of panicked exit from so-called stable coins going on.
- steeleduncan 4y agoI've no doubt they are doing that right now, they would be insane not to. It is presumably what they did to restore confidence during last month's price dip. The problem arises if (my guess is when) they no longer have the funds to do so.