3 ms·
Why does Tether lose $1B a day in market cap between 5pm and 9pm?
- alasdair_ 4y agoEvery day for the past nine days, Tether’s market cap has dropped by a billion dollars abruptly always in the same 3 hour interval. Is this just a reporting thing, where numbers are updated each day? Or is it something else? If it’s a reporting issue, why does it fluctuate at all outside of these time periods?
- sparkie 4y agoMarket cap is USD_price * Units_in_circulation. As Tether is supposed to be pegged to the US dollar price, the drop in market cap is a reduction in the # of units in circulation. People are exchanging Tether back for USD equivalents. Each time this happens, Tether (the company) "burn" the tokens which were in circulation. This burning is likely done in batch mode on a schedule, which would explain the timing pattern of drops in market cap. People are likely pulling out of Tether because there has been long ongoing rumors that they don't have enough USD backing their coin, and with recent crashes like Luna and Celsius, who would take the risk of holding a worthless token which might they may not be able to redeem for anything in future?
- wmf 4y agoTether updates their API manually so yes, it's mostly a reporting issue. https://twitter.com/jp_koning/status/1526744377120411649 https://twitter.com/jp_koning/status/1526744377120411649 https://twitter.com/jp_koning/status/1536152168289402882 https://twitter.com/jp_koning/status/1536152168289402882 The Tether people are generally unreliable so I wouldn't be surprised if they keep no fixed schedule. You can track redemptions in real time using bots like Whale Alert: https://twitter.com/whale_alert/status/1537808066925805568 https://twitter.com/whale_alert/status/1537808066925805568 (transfers to Tether Treasury generally mean USDT is being redeemed/destroyed https://twitter.com/paoloardoino/status/1537380752387719169 https://twitter.com/paoloardoino/status/1537380752387719169 )