4 ms·
Why is Tether a bubble?
by glitchc 1y ago
Why is Tether a bubble?
- iso1631 1y agoIsn't it linked to the value of the US Dollar, which itself is linked to the value of the US Economy?
- tock 1y agoIt 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 agoAs 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 agoI mean sure. Your logic applies to plain treasury bonds as well.
- btilly 1y agoTether 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.