4 ms·
Ya 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 cas
by ausudhz 4y ago
Ya 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?
- Kiro 4y agoWhat exactly do you think you're looking at when clicking the post link? Their balance sheet?
- ausudhz 4y agoYes. Welcome to investment, that's how decisions are made: looking at balance sheets and boring numbers (collaterals/assets etc). If a big investor is willing to sell enough of their tether at a lower price to affect the conversion rate (of a 70B currency), means they figured something that you didn't. I don't know who's holding the majority of the tether and/or who's driving this discount but certainly they did the boring thing... Not looking at the *sentiment*
- pjc50 4y ago> 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? Hasn't that happened a few times? Luna, Celsius?
- ausudhz 4y agoExactly my point. USDT might fall into the same category
- efficax 4y agoif you have a buyer (tether itself) that will always buy usdt at $1, then the price can fluctuate slightly in other exchanges but should always return to $1 since any fall in price becomes an arbitrage opportunity. you buy the 0.98 tether and sell back for $1, making 2 cents on the dollar. If the price keeps falling it’s because people don’t think they can get $1 from tether because they realize it’s actually worth $0. so you sell at the price you can get until the party is over. it’s not clear that this has happened yet, but it might, since tether has been extremely cagey about the assets it has backing usdt 1:1, so cagey you might suspect they are undecapitalized
- tialaramex 4y agoTime matters too. If I'm confident I can get $1000 for 1000 UDST but it will take on average a month, well, do you know what else is worth $1000 in a month? $996 at 5% APR. So 1 USDT == $0.996
- peteradio 4y agoThis doesn't indicate anything about the collateral, its a measure of sentiment and fear.
- ausudhz 4y agoIt's not! You crypto bros have no idea what are you talking about. To have a currency pegged 1-1 with USD (or any other currency to that extent) you must have enough collaterals to support the evaluation Otherwise if, collectively, people put 1 billion USD in tether and then want to get it back altogether how do you think they can do if there's not an asset behind to cover the valuation?
- peteradio 4y agoLOL, I've never invested in any crypto for the record. This is the secondary exchange it doesn't directly interact with bitfinex, someone would have to gobble up 100k USDT minimum to attempt to redeem at bitfinex.
- Kiro 4y agoAre you being intentionally obtuse? Let me make it clear for you once and for all: 1. Tether claims they have collateral. 2. As long as the market thinks this is true it will be pegged to $1. 3. If the market stop believing they have collateral it will depeg from $1. 4. You don't need to have collateral to peg it. You just need to make the market think you have it. 6. Likewise it can depeg even if you actually have collateral if the market thinks you're lying.