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Tether USDT is depegging from dollar
- deleted 4y ago[deleted]
- mudrockbestgirl 4y agoAh yes, that centralized thing that's maybe partially backed by a bunch of third-rate stuff that may or may not actually exist. Here we go again. I'm surprised it didn't happen earlier when the rest of the market was crashing though. Don't forget about the transparency page [0]. It's all true! Trust me! [0] https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports
- doorman2 4y agoIt has depegged before, like when LUNA crashed. During times of high uncertainty, it’s definitely worth 1-2% to get your money out. It remains to be seen if this current run will significantly impact Tether.
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- senttoschool 4y agoWould be a bigger collapse than FTX and Alameda.
- LatteLazy 4y agoBy 2.5 usd cents?
- ddorian43 4y agoIt can cause a bank run. Would you trust Tether or USD if you're uncertain?
- kasey_junk 4y agoThat’s a huge deal for something that’s supposedly pegged. If that were to happen to a traditional money market account it would be front page financial news.
- capableweb 4y agoUnless it goes below 0.92 USD (all time low of USDT, in 2017-2018, which it recovered from), I'm not sure it's as big deal as you make it sound like.
- ddorian43 4y agoIt will go there. The ponzi will break sooner or later. The nice thing is, that the more it continues, the bigger the fall will be.
- herendin 4y ago>The nice thing is, that the more it continues, the bigger the fall will be. Why is that "nice"?
- ddorian43 4y agoIt's nicer than the alternative (to explode even later)
- herendin 4y ago>The nice thing is, that the more it continues, the bigger the fall will be. >It's nicer than the alternative (to explode even later) These two outcomes are mutually exclusive. You're speaking nonsense.
- ddorian43 4y agoBoth outcomes are nicer than the alternative (all crypto-bros become billionaire and everyone else staying poor and being enslaved)
- amouat 4y agoThat's big! Theoretically you can make a lot of money on the spread ("beware picking up pennies in front of a streamroller")
- twoodfin 4y agoWouldn’t that arbitrage put increasing pressure on the backer? If you’re taking on risk that your 98¢ USDT is actually worth less than that, presumably you’ll want to redeem it ASAP.
- LatteLazy 4y agoYou do get some pretty juicy spreads in Crypto though... The CME.BTCX22 has a 5% spread against spot.
- neural_thing 4y ago98 cents is not a stable state for a stable coin. Either it gets back to $1 or is forced to liquidate at however much their assets fetch in a sale.
- ausudhz 4y agoYa how is possible? They supposed to have a 1 to 1 with collaterals to cover the valuation. Well, is pretty obvious (and everybody knew it) that is not the case.
- vidarh 4y agoAll it takes is for there to be low demand on one or more exchanges and for them to not quickly enough place buys to prop it up as people choose to sell lower rather than hold. It could mean a great deal or not much at all, and doesn't really tell us anything about the proportion of collateral unless it depegs much more and they fail to get it under control.
- Kiro 4y agoWhat do you mean? The market sets the price so it's not like it's magically fixed at 1. If it depegs it's because people lose confidence in it and don't trust the $1 value, but there's otherwise nothing special with it. This can happen even if it's actually fully backed (which I doubt).
- vidarh 4y agoIt's not even necessarily confidence (though there probably are also people who are freaking out). If people have their money in USDT and fear losing out on other action (e.g. if you believe there'll be a rebound after the big drop of a lot of the coins the other day), you may be prepared to take a loss to sell your USDT even if you have a 100% confidence that Tether will get it back under control. You'd only need to believe - reasonably or not - that you could potentially increase your net return on betting on a rebound in another coin by more than the depeg. That says nothing about whether or not those sentiments are reasonable, of course.
- ausudhz 4y agoLol? It's pegged because they have enough money to cover their evaluation!!!! If tether is worth 100B in market cap, they must have 100B in assets (collaterals) to cover their evaluation! It's not a sentiment what the hell are you talking about. Economics 101 If that's the case tomorrow someone can create a new token, say is 1-1 with USD, collect a few billions and run away?
- wbl 4y agoReserve Primary fund made history going to $0.97
- smcl 4y agoSo the progression thus far as I see it has been: * Every 1 USDT is backed by exactly 1 USD * Ignore the haters, it's 1:1, we promise! * Ok well it's 1:1 cash equivalents but that's just as good! * Ok that includes commercial paper, but live a little! To the moooon! * Ok so it's strayed a bit and now is not exactly backed 1:1, but it's only 2.5 cents out, come on that's barely anything I wonder what the next stage will be.
- LatteLazy 4y agoMinute to minute peg breaks have nothing to do with backing. You might not believe tether is properly backed. That's fine. But let's not pretend this is connected...
- nkzd 4y agoIt's happening, isn't it?
- rapsey 4y agoNo it is not. If USDT has survived till now it is unlikely to fall.
- stavros 4y agoEverything survives until it falls. It only needs to fall once.
- WJW 4y agoThis is "thanksgiving turkey logic". That the turkey has been fed every day of its life until now is not proof that it will still be fed the day after thanksgiving. Similarly, currencies survives every crisis except their last one.
- rapsey 4y agoIt has been quite forcefully tested throughout the year. It has barely showed any weakness yet we have been hearing USDT is on the brink for years now. The story is getting old. Like a permabear seeing financial doom behind every corner.
- gilrain 4y agoFolks act like my grandparents are gonna die, but I’m like “Bro, they’ve been at this game 90 years. I think they got this.”
- greenthrow 4y agoThat is an extremely bad take. Could have said the same about Luna, Celsius, 3AC, FTX, etc.
- thrwyoilarticle 4y agoA live chart won't have much longevity if this is a temporary divergence. As much as I want it to be true, I think this post should be deleted until there are secondary sources. @dang
- arbuge 4y agoYou are implying that this kind of divergence has happened often in the past, which would then make this one not notable either. If you have any such sources to back up that claim, perhaps you could post them here to support your deletion request?
- deleted 4y ago[deleted]
- thrwyoilarticle 4y agohttps://news.ycombinator.com/item?id=31349988 https://news.ycombinator.com/item?id=31349988 https://news.ycombinator.com/item?id=31723438 https://news.ycombinator.com/item?id=31723438 Although both are secondary.
- PebblesRox 4y agoI think the point was that the chart is going to keep updating until eventually what happens today (and is discussed in the comments) will not be visible from the link. But I don't think deleting the post is necessary. When a more permanent source becomes available, @dang can switch the link and in the meantime we can keep discussing the chart.
- SeanAnderson 4y agoIf you adjust the timeframe on OP's linked chart you can see that Tether depegged briefly earlier this year. https://i.imgur.com/3PJVGhA.png https://i.imgur.com/3PJVGhA.png
- senko 4y agoUSDT:USD at 0.98 happened twice in last 4 years and both times was successfully defended (research methodology: googled "usdt to usd" and clicked 5Y range in the chart) If this drops below 0.95, it's popcorn time.
- tetherclowns 4y agoRestarting the printer, give me a moment
- aenis 4y agoHow much longer its gonna take?!
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- ddorian43 4y agoImagine what will happen next year when the recession is continuing with more layoffs and higher sustained rates. I really hope it gets destroyed, really plays with peoples hopes & dreams to get rich quick.
- greenthrow 4y agoThis is not a result of the wider recession directly. More a result of repeated, clear demonstration that the entire crypto "economy" is built on scams of one kind or another. FTX is the biggest yet and more people are realizing, rationally, they are no longer comfortable having significant money in crypto.
- ddorian43 4y agoCorrect. But in a bull run it will continue even more (like it has). While the recession should force it to explode instead of failing even later.
- MichaelCollins 4y ago
- bluesign 4y agoIt was >1.00 recently, it all depends on external factors ( like btc increased to 21k before dropping to 16k ) because panicked people trying to get money out by buying btc, then converting to usdt and finally converting to hard cash.
- deleted 4y ago[deleted]
- machina_ex_deus 4y agoWould be interesting to watch the circulating supply - and whether they managed to shrink the market cap. Currently at 69,613,437,846 USDT.https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/ It would be very suspicious if this number doesn't go down on their next update.
- moralestapia 4y agoELI5, how? Isn't USDT supposed to be a 1:1 with USD? Update: I get it thanks, so 1 USDT == 1 USD, but the USDT token in itself could be bought/sold at any price. I mean that's pretty obvious but I never thought of USDT as a separate instrument, I thought it was a literal "map of USD into the crypto world" (which it is, kind of, but not really, dang). So, USDT is pretty much a future backed by USD, right?
- haolez 4y agoYou can't control the secondary market. I can sell my Tethers for whatever value I want. If I think that, for some reason, their value is zero, I can try to sell at a discount before others realize this.
- LegitShady 4y agoThe point is that tether is wlsupposed to be willing to buy back tethers at $1 each so that if the price drops below $1 they buy all the sub $1 tether until the price returns to $1. You can sell it at a discount but why if you can get $1 for it. That makes no sense. For tether to depeg something else must be going on
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- peteradio 4y agoWonder if its a friction thing. Do you have to setup a special account to redeem on the primary channel?
- pjc50 4y agoThe "official" channel has a MOQ of $100,000: https://tether.to/en/fees/ https://tether.to/en/fees/ There is a huge amount of friction. It's not clear whether they run market-maker operations to pick up the spread between Tether and $1. As always, the question is what actual assets Tether has to meet its claims.
- minajevs 4y agoIf it goes down - the whole crypto movement and future optimism will be dead.
- atemerev 4y agoStablecoins are the product of centralized human-managed financial engineering, they are not exactly what crypto proponents had in mind. They are convenient for some purposes, but everyone keeps in mind that they are not "real" crypto.
- k__ 4y agoProper degenst don't use USDT or FTX, they use DAI and Uniswap, and the latter two are doing fine.
- swarnie 4y agoThis reads like a rehash of the "not real communism" copy pasta from a few years back. Bravo if its a deliberate homage
- optimalsolver 4y agoNo true ScotsCoin.
- Jamie9912 4y agoCool, i'm going to buy some cheap Tether before it goes back to being a dollar
- buzzdenver 4y agoUSDT is at 98.4 cents now, so the upside is 1.6% (assuming USDT doesn't go over $1), and the downside is 100% if it goes to 0.
- xyst 4y agoIt’s Luna all over again. Time to start the short positions
- winslett 4y agoTether is a fiat currency supported by the crypto oligarchs. It doesn't have to be backed. It just has to avoid taxes, avoid governments, and avoid sequestration. You can't take a tether and redeem it for a dollar, so it doesn't really even have a price. Tether is just a placeholder for a dollar in the crypto-world. Furthermore, Bitcoins aren't really priced in United States Dollars anymore, they are priced in Tether Dollars. The price reported on CNBC is tether dollars. It's so synthetic, even that chart doesn't really matter. So, where can we find real dollars being exchanged for Bitcoin? We can find that in the GBTC trust. I would argue the actual price of a Tether is equal to the GBTC discount, which currently sits at 37%. So, a tether dollar is actually about 0.62 dollars.
- funstuff007 4y agoAway from Tethers for second, given the enormous GBTC discount to quoted BTC price is there any reason to purchase BTC with USD rather than buying GBTC with USD?
- bombcar 4y agoDiscounts that aren’t instantly arbitraged away usually have a reason. I don’t know in this case but it sounds like people don’t trust GBTC.
- funstuff007 4y agoETFs are not your friends.
- CamelCaseName 4y agoNo redemption or creation allowed in GBTC while you get crushed by fees
- LudwigNagasena 4y ago> So, where can we find real dollars being exchanged for Bitcoin? At an over-the-counter exchange? You can literally give paper money and receive crypto and vice versa.
- JoachimS 4y agoTruly mesmerizing to watch. One can really see the hold points algos have given and changes in trading patterns, frequency as points are passed.
- deweller 4y agoIf Tether has real liquid reserves and can meet redemption requests, then the peg will return to ~$1. If Tether does not have sufficient reserves and stops honoring redemptions, then the peg will collapse. Unpopular opinion: This could be investor panic and a temporary liquidity squeeze. In May Tether weathered a significant liquidity crunch and recovered.
- peteradio 4y agoReturn to peg wouldn't really indicate anything about collateral... we are watching secondary market, apparently only the big boys (100k+ players) are interacting with bitfinex directly.
- devoutsalsa 4y agoThis crunch appears to be going lower than the May dip. We shall see what happens!
- lazide 4y agolol- Tether has never honored any real redemption requests, near as I can tell.
- capableweb 4y agoIn May Tether went down to a whopping 0.9982 USD and people cried it was the end of Tether. It recovered. In April 2017 Tether went down to 0.9213 USD and people cried it was the end of Tether. It recovered too. Don't get me wrong, I think eventually Tether will fall, it's all just too shady to survive long-term. But I don't think it seems it's happening now and I'm not sure it'll even happen like this. It'll start out with rumors that people can't redeem their USDT for USD, and people will pull out in a flash crashing Tether/Bitfinex in the process. It'll be faster and harder than what we've seen before. And by the metrics so far, it's not fast nor hard enough to cause this.
- headsoup 4y agoDoesn't Tether(Bitfinex) just stop allowing redemptions for a while when this happens?
- prvit 4y agoBitfinex is maintaining the peg, nothing exciting is happening here https://trading.bitfinex.com/t/UST:USD?type=exchange https://trading.bitfinex.com/t/UST:USD?type=exchange These headlines come out every couple of months, nothing ever happens. In fact, odds are that Tether makes a bunch of money every time this happens.
- Maakuth 4y agoSo is there now an arbitrage opportunity? Or are the fees so high that it's not practical for 2% price delta?
- aliljet 4y agoThat's the question I had. Ostensibly, people are giving away a dollar for 98 cents right now. I'm confused about why anyone would want to do that unless they thought that tethered dollar isn't actually worth a real US dollar. If USDT is fine, seems like free money is on the table...
- matthewdgreen 4y agoThey are doing it because nobody has any idea whether USDT is fine except for Tether. So every time it de-pegs, rational people have to run towards the exit and take a loss, since nobody knows whether this is a temporary “Tether makes some bank on fear” incident, or if it’s the big one. Stablecoin issuers have basically two jobs. One is to maintain the peg. But the really important job is to convince people that even if the peg temporarily breaks: the money is still there and it won’t be the start of a collapse. Tether does neither of these things. And worse: they have a financial incentive to sweep their customers into periodic panics, so they can buy up Tethers at a discount. Nobody should be anywhere near this ecosystem, and in a world where competing options exist it’s amazing to me that people are.
- smsm42 4y agoIf you aren't sure Tether is good for it, why hold USDT at all? If you hold it, why sell it at every minute movement? That doesn't look like rational behavior, that looks like burning money. If you don't have risk tolerance or don't trust this asset - why own it at all?
- chinathrow 4y agoCan someone set up a notification to when the full meltdown really starts? I'd pay real money to someone sending me an SMS with a URL in it to watch.
- woeirua 4y agoTether is the big one. If Tether collapses it's going to take down Binance and probably every other exchange with it. People have been warning about this for quite some time [1]. Tether is clearly under capitalized, and if you believe the worst rumors, was basically a perpetual motion machine being used to prop up Bitcoins price. [1] https://coingeek.com/even-binance-thinks-the-tether-stablecoin-is-an-unbacked-scam/ https://coingeek.com/even-binance-thinks-the-tether-stableco...
- capableweb 4y ago> Tether is the big one. If Tether collapses it's going to take down Binance and probably every other exchange with it. Unlikely to bring down certain exchanges that actually keeps peoples currencies around and doesn't lend it out, or fuck around in other ways with peoples deposits. Coinbase comes to mind, where if everyone would take out their money and cryptocurrency ("bank-run"), everyone would likely end up actually getting their things out, although the company in that case would still be fucked.
- xnorswap 4y agoEven if exchanges don't (on paper) loan on their capital, they still must have their USD somewhere, and that bank will surely be lending it out. These exchanges are so big that a run on them would cause a run on the institutions they bank with, so you'd still get a liquidity squeeze somewhere, even with everyone acting with the best intentions. And given recent history it's hard to know which exchanges haven't been loaning out their capital.
- capableweb 4y agoGranted, I don't have any insider information on how Coinbase actually deal with things, I'm only judging things by the public information they put out themselves. Also, I don't keep any funds at Coinbase myself, for whatever it's worth. But this is what Coinbase themselves say: > There can’t be a “run on the bank” at Coinbase. As you can review in our publicly filed, audited financial statements, we hold customer assets 1:1. Any institutional lending activity at Coinbase is at the discretion of the customer and backed by collateral. We have no gating for client loan recalls or withdrawals. This is from https://www.coinbase.com/blog/our-approach-to-transparency-risk-management-and-consumer-protection https://www.coinbase.com/blog/our-approach-to-transparency-r...
- ReptileMan 4y agoHow many USDT are printed so far?
- formerly_proven 4y agoLooks like they're pegging it up again.
- bluelightning2k 4y agoTo those saying "if it's backed by dollars - isn't this an arbitrage opportunity" you are right. But the key word there is "IF". The crypto-world is essentially mass scale "creative-accounting". At the end of the day the MAXIMUM amount of money that can come out, is what went in. And "money out" includes not just the operating costs, mining fees, and other real-world resources used, but also the staggering number of thefts, rug-pulls, etc.
- bluelightning2k 4y agoAlso - if you're tempted to point to stocks, etc. and say investing generates a return. That's correct. Because ultimately that capital is being deployed in a resource-generating activity. E.g. you're financing a factory, that takes a thing and turns it into a more valuable thing. Or a software company which ultimately saves people time. Dig deeply enough into it and you see an actual rersource-generating activity at some level of abstraction. The net resource-consumption of crypto AND the cash outflows (rugpulls, exchanges, VCs, phishing) is truly staggering. It doesn't matter if you convert that real-world loss into casino chips, then 17 credit cards, then chocolate-coated Monopoly money. Those abstractions aren't serving a purpose. They're there purely to obscure that clear underlying resource-loss as long as possible.
- danuker 4y ago> mass scale "creative-accounting" Indeed, and these schemes tend to fall apart when money is no longer free (i.e. there exists a non-zero interest rate). Also, in the process of the interest rate becoming non-zero, existing bonds fall in price (because investors would prefer the newer, higher-yield coupons). The mistake (and also the reason for existence) of Tether was the ability to invest the money. Fractional reserve. When your business model counts on investments always going up, you might go out of business.
- bluelightning2k 4y agoThere is actually a mechanism for creating money. It's debt. The mechanism here is facilitating commerce. A simple analogy is: You're selling oranges. I'm selling apples. Bartering is inefficient so we invented currency. I don't have any money right now. I buy your orange with debt, you buy my apple, the fruit is used instead of rotting, etc. Essentially we only make a deal because we want what we're getting more than what we have. So we're getting something worth (to us) e.g. 130% of what we're giving. So every trade multiplies the effective resource by e.g. 30%. Debt facilitates the trade, while simultaneously creating the value. Up. to. a. point. Without spoiling the ending that everyone knows is coming... crypto is not this. Crypto is not facilitating any (legal) economic activity. Nobody is taking this and buying machinery with a resource-generating payback period.
- hcks 4y agoAs much as I would enjoy seeing it go to 0, nothing happened at the moment that didn’t happen at least 2 times already. Wake me up when it’s below 95 cents
- dudeinjapan 4y agoBlack swan? Or just a white swan in a tar pit?
- optimalsolver 4y agoTether collapsing would be the exact opposite of a black swan event.
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- dudeinjapan 4y agoIs there a good way to short tether? I think it's the trade of the century... the value basically cannot rise above $1. It looks like a ticking timebomb.
- lupire 4y agoCMC is reporting $.9999, why? https://coinmarketcap.com/ https://coinmarketcap.com/
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- lupire 4y agoAlready back to peg. Also, BTC dropped 5% today and recovered.
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- EVa5I7bHFq9mnYK 4y agoWhy all these top posts about crypto on HN? Shouldn't really interest anyone, let the children play.