4 ms·
how is it “so far below” it’s recovered to less than a 4% discount
by tempsy 4y ago
how is it “so far below”
it’s recovered to less than a 4% discount
- charcircuit 4y agoThere is no fee to covert USDC to USD. So as long as you buying USDC and depositing it into Circle is less than $1 per USDC you make profit. As long as you make profit it makes sense to arbitrage as much as you can.
- tempsy 4y agothat’s if you have a Circle account which effectively no individual has access to. if you convert USDC to USD on Coinbase or another exchange you’re paying the market rate
- charcircuit 4y agoThe arbitrage the comment was talking about would be done by people with Circle accounts. If you don't have an account it would be in your interest to sell your USDC for as close to $1 possible. This will inflate the value of USDC on the open market until Circle account holders start to fear that they will be holding the bag.
- tempsy 4y agoif major usdc holders who have a circle account were primarily concerned with tiny arbitrage plays they wouldn’t be holding a stablecoin earning zero yield when t-bills pay 5% to begin with
- charcircuit 4y agoThis isn't a tiny arbitrage play because you can repeatedly do it for as long as circle is liquid. Even if you don't hold a lot of USDC it's selling at a discount on the open market. If it goes into a full bankrun all circle accounts will be fighting over what share of the $43.5 billion reserves that they will get.
- deleted 4y ago[deleted]
- saurik 4y agoCoinbase actually does it 1:1 by proxy from Circle: you don't have to "trade" USDC-USD. They aren't right now, but they normally go above and beyond by being willing to do it on weekends, while Circle itself only operates on weekdays, and they don't want to stake their own fate towards that, so they said they are pausing doing that until Monday.
- latchkey 4y agoNot only that, but if coinbase catches you doing this, they will immediately lock your account.
- everfree 4y agoIf they catch you doing what?
- latchkey 4y agoTrying to arb usdc.
- everfree 4y agoDo you have a source for that? It seems like it would generally be in Coinbase and Circle's best interest for people to arb USDC (at times when redemptions are live).
- mike_d 4y agoYou mean trading assets for other assets to turn a profit, literally the entire point of Coinbase Pro?
- latchkey 4y agoNo, I don't mean that. CBP is fine for them, since they earn fees on it. If you pull your funds off CB into a DEX and then do the arbitrage, that's when they get unhappy. Yes, that's happened to someone I know. Their account was locked as soon as CB figured out that is what they were being used for. They don't like just being a fiat ramp since it doesn't earn them anything.
- wbl 4y agoRemember when Primary reserve broke the buck and got unwound? That was over a smaller deviation than this.