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If 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 hon
by deweller 4y ago
If 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.
- Kiro 4y agoTether doesn't honor redemptions and never has so your theory is wrong.