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Can someone explain why the bank run on Tether hasn't already happened? We've seen with FTX that it only takes a little FUD for people to get scared and start
by bibabaloo 4y ago
Can someone explain why the bank run on Tether hasn't already happened?
We've seen with FTX that it only takes a little FUD for people to get scared and start withdrawing.
It's not like there isn't more credible stablecoin alternatives, USDC looks a lot more credible.
- wmf 4y agoDestroying Tether would trigger a crash that benefits no one in crypto.
- zen21 4y agoA casino going bankrupt means gambling addicts will be able to seek treatment for their illness.
- evdubs 4y agoA (partial) bank run on Tether already happened. From May 2022 - July 2022, Tether capitalization went from $83B to $66B ($17B withdrawn). The recent bank run has so far been a lot smaller. From Nov 9th to today, the move has been from $69.75B to $67.25B ($2.5B withdrawn). Maybe if the FTX contagion extends, we'll see more redemptions. https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- SilasX 4y agoA bank "run" where it successfully honors redemptions, and the vast majority don't need to redeem, isn't really what is meant by a run.
- lamontcg 4y agoThere's no real offramp from Tether to USD. And its likely that Tether is all crypto and not much actual USD involved at all, and it looks more like crypto collateralized loans. I doubt that Tether dying kills crypto, but probably the other way around and crypto dying obviously kills Tether[*]. And the "redemptions" are likely loans being paid back (which is just Tether being returned and burned) rather than $USD going out the door. It is very simply not at all believable that the $17B drawdown in the float earlier this year was $17B of USD going out the door -- that interpretation of how Tether operates has to be wrong if you think about it for longer than a few seconds.