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This doesn't indicate anything about the collateral, its a measure of sentiment and fear.
by peteradio 4y ago
This 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.