4 ms·

This bubble will inevitably burst louder than Krakatoa.

dboreham 1y ago
Curious: why? Aren't bubbles about people buying some instrument (stock, bond, bitcoin...) with borrowed real money that is not eventually worth as much as they think it is? People buying stablecoins are exchanging presumably not-borrowed real money for something that amounts to a zero-interest money market fund. Presumably not borrowed because the stablecoin explicitly pays no yield.
- deleted 1y ago
  [deleted]
- throwaway-0001 1y ago
  Someone just deleted a comment so I’ll put it again here “ Tether is backed by nothing, so it can presumably print without end. If it's suspected they've done this, it could lose its peg. If that happens, it could have consequences.” There is no reason not to do an audit except when it’s a scam/all money gone. No accounting company wants to do their audit - guess why.
  - wslh 1y ago
    > Tether is backed by nothing... If you look at their yearly profits and liquid cash, clearly Tether is backed by something. This is not the same as saying that they have full transparency but you cannot have those profits in dollars out of thin air.
    - throwaway-0001 1y ago
      “Since at least 2017 … Tether has been assuring investors that it will get audited, though it has yet to deliver“ can you give me a single reasonable reason this was not done in 8 years? Usually the correct answer is the simplest - fraud.
      - wslh 1y ago
        My argument doesn't contradicts yours but, again, you are not the 17th largest holder of US debt out of thin air.
        throwaway-0001 1y ago
        Profits can be a simple Ponzi scheme without a proper audit. That’s the simpler answer. Any evidence that they actually own? “ In its own attestation report for Q2 2025, Tether stated it holds about US$127 billion in U.S. Treasuries” this is the only source. And tbh anyone can “attest” it owns billions of whatever. Again, no audit because there is nothing there. They only attest through BDO Italia. And attestations are easily gamed. Usually worthless, but useful for usdt hodlers. I wonder why they use bdo? See below their history. About bdo: In the UK, a former senior manager at BDO (in the UK member firm) was banned for 20 years for creating false audit documents and mis-using signatures. In July 2025 the UK regulator Financial Reporting Council (FRC) flagged the BDO network as having audit quality “significantly short of expectations”. Only about half the audits reviewed were deemed satisfactory
  - delabay 1y ago
    As of 2025, USD stablecoins are a regulated industry. The frequency of uninformed comments like these will asymptotically go to zero.
    - disgruntledphd2 1y ago
      > As of 2025, USD stablecoins are a regulated industry. The frequency of uninformed comments like these will asymptotically go to zero. You didn't answer the audit question, which is really important.
    - array_key_first 1y ago
      Right, but Tether doesn't comply with the law at all. So... I mean they might, maybe. But you can't point to the law as proof of something when the thing you're defending doesn't follow the law.
wslh 1y ago
Again, this is not exactly crypto: https://news.ycombinator.com/item?id=45747958 https://news.ycombinator.com/item?id=45747958
glitchc 1y ago
Why is Tether a bubble?
- iso1631 1y ago
  Isn't it linked to the value of the US Dollar, which itself is linked to the value of the US Economy?
  - tock 1y ago
    It isn't linked to the value of a US dollar. It is the US dollar. The value of 1 token will always be 1 USD. If the US economy collapses the USD will be less valuable but again: 1 token is still 1 USD.
    - tos1 1y ago
      As with any good (and especially "currency"), it's only worth 1 USD as long as somebody (including the issuing company) is willing to give you 1 USD for it. Even if it is "linked", "pegged" or called something else.
      - tock 1y ago
        I mean sure. Your logic applies to plain treasury bonds as well.
- btilly 1y ago
  Tether is a bubble because it is an organization run by criminals, that has in the past been convicted of fraud, and is unable to pass a basic financial audit. The most reasonable explanation is that it is a Ponzi scheme. Which will appear to work right until it doesn't. And if it stops working, the entire crypto universe will implode. That said, the current President and many who are close to him have significant portions of money invested in crypto. That depend on Tether. There is therefore a reasonable expectation that the US government will covertly back Tether for the next several years if there is any prospect of a collapse. This expectation is supported by Trump's declaration last March of creating a "strategic crypto reserve" for the USA. See https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/ https://www.whitehouse.gov/presidential-actions/2025/03/esta.... On the face of it, this executive order only helps crypto by taking some of it out of circulation. But the provision in 3C of creating "budget neutral" strategies for acquiring more bitcoin, could easily cover converting actual USD to Tether. Particularly if the Tether was available at a discount to the USD.

Curious: why? Aren't bubbles about people buying some instrument (stock, bond, bitcoin...) with borrowed real money that is not eventually worth as much as they think it is? People buying stablecoins are exchanging presumably not-borrowed real money for something that amounts to a zero-interest money market fund. Presumably not borrowed because the stablecoin explicitly pays no yield.

deleted 1y ago
[deleted]
throwaway-0001 1y ago
Someone just deleted a comment so I’ll put it again here “ Tether is backed by nothing, so it can presumably print without end. If it's suspected they've done this, it could lose its peg. If that happens, it could have consequences.” There is no reason not to do an audit except when it’s a scam/all money gone. No accounting company wants to do their audit - guess why.
- wslh 1y ago
  > Tether is backed by nothing... If you look at their yearly profits and liquid cash, clearly Tether is backed by something. This is not the same as saying that they have full transparency but you cannot have those profits in dollars out of thin air.
  - throwaway-0001 1y ago
    “Since at least 2017 … Tether has been assuring investors that it will get audited, though it has yet to deliver“ can you give me a single reasonable reason this was not done in 8 years? Usually the correct answer is the simplest - fraud.
    - wslh 1y ago
      My argument doesn't contradicts yours but, again, you are not the 17th largest holder of US debt out of thin air.
      - throwaway-0001 1y ago
        Profits can be a simple Ponzi scheme without a proper audit. That’s the simpler answer. Any evidence that they actually own? “ In its own attestation report for Q2 2025, Tether stated it holds about US$127 billion in U.S. Treasuries” this is the only source. And tbh anyone can “attest” it owns billions of whatever. Again, no audit because there is nothing there. They only attest through BDO Italia. And attestations are easily gamed. Usually worthless, but useful for usdt hodlers. I wonder why they use bdo? See below their history. About bdo: In the UK, a former senior manager at BDO (in the UK member firm) was banned for 20 years for creating false audit documents and mis-using signatures. In July 2025 the UK regulator Financial Reporting Council (FRC) flagged the BDO network as having audit quality “significantly short of expectations”. Only about half the audits reviewed were deemed satisfactory
- delabay 1y ago
  As of 2025, USD stablecoins are a regulated industry. The frequency of uninformed comments like these will asymptotically go to zero.
  - disgruntledphd2 1y ago
    > As of 2025, USD stablecoins are a regulated industry. The frequency of uninformed comments like these will asymptotically go to zero. You didn't answer the audit question, which is really important.
  - array_key_first 1y ago
    Right, but Tether doesn't comply with the law at all. So... I mean they might, maybe. But you can't point to the law as proof of something when the thing you're defending doesn't follow the law.

wslh 1y ago

Again, this is not exactly crypto: https://news.ycombinator.com/item?id=45747958 https://news.ycombinator.com/item?id=45747958

glitchc 1y ago

Why is Tether a bubble?

iso1631 1y ago
Isn't it linked to the value of the US Dollar, which itself is linked to the value of the US Economy?
- tock 1y ago
  It isn't linked to the value of a US dollar. It is the US dollar. The value of 1 token will always be 1 USD. If the US economy collapses the USD will be less valuable but again: 1 token is still 1 USD.
  - tos1 1y ago
    As with any good (and especially "currency"), it's only worth 1 USD as long as somebody (including the issuing company) is willing to give you 1 USD for it. Even if it is "linked", "pegged" or called something else.
    - tock 1y ago
      I mean sure. Your logic applies to plain treasury bonds as well.
btilly 1y ago
Tether is a bubble because it is an organization run by criminals, that has in the past been convicted of fraud, and is unable to pass a basic financial audit. The most reasonable explanation is that it is a Ponzi scheme. Which will appear to work right until it doesn't. And if it stops working, the entire crypto universe will implode. That said, the current President and many who are close to him have significant portions of money invested in crypto. That depend on Tether. There is therefore a reasonable expectation that the US government will covertly back Tether for the next several years if there is any prospect of a collapse. This expectation is supported by Trump's declaration last March of creating a "strategic crypto reserve" for the USA. See https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/ https://www.whitehouse.gov/presidential-actions/2025/03/esta.... On the face of it, this executive order only helps crypto by taking some of it out of circulation. But the provision in 3C of creating "budget neutral" strategies for acquiring more bitcoin, could easily cover converting actual USD to Tether. Particularly if the Tether was available at a discount to the USD.