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Tether's USDT Stablecoin Slips from $1 Peg
- oneoff786 4y agoLooking like it might drop below 98 cents soon. Interesting
- Lionga 4y ago97 cents on Kraken now
- sdiacom 4y agoAnd yet it's a bit over one dollar on Bitfinex. It's gotta be bad, they're not even bothering to make it subtle this time.
- rippercushions 4y agoBitfinex and Tether are effectively the same company, so the Tether price there is disconnected from the rest of the market.
- oneoff786 4y agoI don’t really follow in detail. What am I getting when I Google search “usdt price”? (97.5 currently).
- fabian2k 4y agoI really don't know enough about this topic to judge the impact, but from the data I can see this looks like it depegged lower than in the previous incident that was widely reported. That one was to 0.995 and this one is to 0.990 (at the moment I looked it up).
- rocqua 4y agoI believe the all time low of tether is 0.92$. So it has recovered from worse.
- sekai 4y agoYeah, it's a non-story, it's almost never exactly 1:1 in secondary markets.
- lupire 4y agoThe primary market for tether has huge transaction fees, so any collapse will happen on secondary first.
- bunderbunder 4y agoI am not a markets expert, but I would guess that straying far from $1.000 on the secondary markets for any length of time at all is a sign that something very bad is simmering under the surface. There should, I would think, be enough liquidity in a fungible, theoretically stable asset like this that such a glaring arbitrage opportunity can only exist on quantum time scales.
- bhouston 4y agoI am waiting for a panic spreading tweet from CZ. He has his own stable coin so it would make sense to spread panic here. But this may be giving the game away a little too obviously, so maybe now isn’t the time. I do expect unless something else drops that Tether will survive this.
- oneoff786 4y ago> He has his own stable coin so it would make a bit of sense to spread panic here. Yeah that couldn’t possibly backfire
- kuratkull 4y agoStrange that the price has dropped a lot less on Binance, to 99.8, while it's 97.x on Coinbase
- pjc50 4y agoPresumably Tether run market-maker operations to stabilize it, but that requires keeping actually valuable cash at exchanges, which has its own risks. They can run out of firepower, and it's not as simple as it sounds to arbitrage between exchanges.
- permo-w 4y agoit doesn’t sound simple. if i’m understanding correctly it sounds like it could very quickly lead to competing demands of more and more money from competing exchanges
- SilasX 4y agoIt’s seeing significant borrowing on the DeFi platforms too, perhaps in anticipation of a price collapse (which would make it easier to pay back): Aave, 60% to borrow: https://app.aave.com/reserve-overview/?underlyingAsset=0xdac17f958d2ee523a2206206994597c13d831ec7&marketName=proto_mainnet https://app.aave.com/reserve-overview/?underlyingAsset=0xdac... Compound, ~40% to borrow: https://compound.finance/markets/USDT https://compound.finance/markets/USDT
- deweller 4y agoI assume that holders of USDT are, perhaps, concerned that Bitfinex and Tether are similar to the FTT token. They may wonder if Bitfinex has Tether on its balance sheet and that the Tether is not actually backed by reserves as claimed. In May, Tether weathered a significant liquidity crunch and recovered its peg by July.
- jpm_sd 4y ago"A representative for Tether told CoinDesk in an email that issuer Tether Global is unexposed to both Alameda and FTX." Well, except in the broader sense of crypto contagion. Tether is certainly exposed to BTC and ETH, both of which are plummeting this week.
- olalonde 4y ago> Tether is certainly exposed to BTC and ETH, both of which are plummeting this week. Why certainly? It would be quite remarkably dumb. In theory, a fiat-backed stablecoin is only supposed to be exposed to the fiat it is backed by.
- fjckvuvub5 4y agoYes. It would. And yet they do.
- gilrain 4y agoBecause cryptbros are incapable of taking the wise choice when the greedy choice is on the table. So predictable.
- krzyk 4y agocrypto, stocks, derivatives - greed is the major propeller of all of them
- bunderbunder 4y agoWe had that recent-ish case in the New York courts that uncovered that USDT is mostly not backed by fiat currency, and that they had been lying about this since at least 2017.
- olalonde 4y agoI understand that they deviate from theory (e.g. with commercial paper, treasury bills, etc.) but backing USDT with BTC/ETH would be next-level stupid. Did the case you mentioned uncover that USDT was backed by BTC or ETH?
- olalonde 4y ago6 months ago as well: https://news.ycombinator.com/item?id=31349988 https://news.ycombinator.com/item?id=31349988
- deleted 4y ago[deleted]
- dfc 4y ago> USDT is trading at 97 cents on several bourses, and briefly fell as low as 93 cents on the Kraken exchange. Is bourses crypto jargon I'm not aware of?
- logifail 4y ago> Is bourses crypto jargon Much older than that, it's more general finance jargon. The relevant definition[0] is: "A stock exchange. (figuratively) Any place, real or imagined, where the value of a thing is settled." [0] https://en.wiktionary.org/wiki/bourse https://en.wiktionary.org/wiki/bourse
- lotsofspots 4y agoIt's a common term for a stock market in non-English speaking countries.
- matthewaveryusa 4y agoBourse in French means a sac/purse, scrotum, a scholarship, a market, and the stock market. Not sure what the origin is but it's not Latin. Edit: It's from Greek inspired mediaeval Latin bursa meaning leather
- deleted 4y ago[deleted]
- akmarinov 4y agoIt translates to market or marketplace
- matthewaveryusa 4y agoIs this the same as breaking the buck?
- rippercushions 4y agoYes, if it sticks, but Tether has had a couple of scares before and bounced back.
- rippercushions 4y agoAnd back up to 0.99 on Coinbase as I type this: https://pro.coinbase.com/trade/USDT-USD https://pro.coinbase.com/trade/USDT-USD Meanwhile, Alameda (SBF/FTX's trading arm) is apparently shorting Tether. https://twitter.com/mhonkasalo/status/1590665714490544128 https://twitter.com/mhonkasalo/status/1590665714490544128 Which is particularly interesting since they're known to be one of Tether's largest customers. The only rational explanation I can think of is that they think Tether is primed to tank, and they're trying to beat the rush to the exits like Goldman Sachs pouncing on Bear Sterns.
- mjnaus 4y agoLarge holders of Tether would be pretty dumb to short it, as they'd be shooting themselves in the foot. If Almeda indeed knows something the rest of the market doesn't, they would (assuming rational action) quietly be exiting their position.
- theCrowing 4y agodepends on the payout if your short is better positioned than your holdings...you short. Like Deutsche did 2008.
- forgetfulness 4y agoThey could do both, cut their losses by selling and selling high, buying low other people's Tether, depends on how much of their own holdings they can liquidate.
- throwaway294566 4y agoShorting tether can simply be a hedge against falling tether if you are holding large amounts. Doing that with stocks is completely normal and nothing to raise an eyebrow about.
- edf13 4y agoI'd say it's more of an issue that they are still trading when potentially insolvent
- johnebgd 4y agoIt finally has begun.
- deleted 4y ago[deleted]
- ndsipa_pomu 4y agohttps://xkcd.com/1656/ https://xkcd.com/1656/
- irusensei 4y agoEverytime tether goes 0.99c these wishful thinking threads appear. No thread is created when the value is 1.01. Perhaps those fluctuations are the norm price on exchanges? I’m not defending tether (I’m going to be downvoted to oblivion anyway because these types of threads are based on spite rather than logic) but it always have the “raises fist this time I got you spider man” vibe.
- zinekeller 4y agoActually, it went to ~0.95 (and apparently went 0.93 on a single exchange). 0.99 is not really significant (and is usually not pointed out anyways). Correct me if my data is incorrect, but checking on historical data it seems that (except for its early days) Tether didn't went above 1.02, so that's maybe the reason that all of reports were dips?
- evdubs 4y agoSure, it's FTX, but Tether traded up to $1.20 yesterday. https://ftx.com/intl/trade/USDT/USD https://ftx.com/intl/trade/USDT/USD
- evdubs 4y agoTo add to this, USDT:USD reached $1.20 on FTX yesterday, and has spent most of today and yesterday above $1.01 with around ~$10M trading every hour. Even though FTX has halted withdrawals and is presumed dead, this type of trading activity is useful in understanding how stablecoin markets perform under extreme stress. https://ftx.com/intl/trade/USDT/USD https://ftx.com/intl/trade/USDT/USD