Crypto: Interesting take on USDT trust and valuation

[johnarb]

"And this is what makes stablecoins so powerful, and worrisome to regulators/TradFi. They are backed by the same thing as the $$$, full faith and credit...of the crypto universe!"

"The crypto universe is creating the next reserve currency, a stablecoin. They will accept it 1:1 for the dollar, WITHOUT a verified trust."

https://twitter.com/x/status/1399947274793463813

 

[RedDuke]

"And this is what makes stablecoins so powerful, and worrisome to regulators/TradFi. They are backed by the same thing as the $$$, full faith and credit...of the crypto universe!"

"The crypto universe is creating the next reserve currency, a stablecoin. They will accept it 1:1 for the dollar, WITHOUT a verified trust."

https://twitter.com/x/status/1399947274793463813

USD is backed by few other things other than just faith

 

[johnarb]

USD is backed by few other things other than just faith

Depends on how you look at it. I think Jim's thread is not in contradiction with what you're alluding to

USD is not backed by gold

 

[Overnight]

Depends on how you look at it. I think Jim's thread is not in contradiction with what you're alluding to

USD is not backed by gold

The USD is backed by the faith and reliance on the American peoples to produce the value in the USD it so richly should deserve. The sweat equity of the American workforce to produce goods and services that the rest of the world desires.

 

[johnarb]

The USD is backed by the faith and reliance on the American peoples to produce the value in the USD it so richly should deserve. The sweat equity of the American workforce to produce goods and services that the rest of the world desires.

As I said on my reply to RedDuke, this is not disagreeing with the Twitter thread. Faith is not quantifiable on a unit-by-unit basis. The concept is subjective

Let's examine a $100 bill, can you equate that to a certain "faith" % of the US GDP?

What happens when they print 20% more USD and the US GDP did not grow by the same amount? This is the issue with debasing the value of everyone's time and work efforts


I know you're not in crypto, but the thread was really good (imho)

There's a lot of fud on USDT not having enough $ if everyone was to try to redeem the US $ for every USDT, but as one of the Tweets stated, no one is redeeming USDT for $

If I tell you that cryptos people prefer USDT (or other stable coins) to actual US $, you'll say I'm nuts. Here's the thing, USDT has a high yield, 7% APY or higher, whether on CeFi or DeFi

A friend of mine wanted to pay me $5,200 for 5000 USDT a few months ago, which I lowered to $2K and no surcharge, not because I didn't trust him, but because I don't want any issues with the person-to-person bank transfer, if it gets reversed or questioned by the banks in the middle

I'm willing to take a $2K loss risk for my friend but $5K is a little too high

Why was he trying to get the USDT from me? Because he wanted it in the fastest way possible, and not have to wait for the bank transfer to Coinbase and not have to wait for the Coinbase hold of 5 business days on the cryptos before it can be withdrawn to local wallets

Coinbase did not have USDT at the time, but he could use Uniswap or any dex to exchange Eth to USDT, but that meant more fees incurred, gwei and uniswap fees/spreads

He wanted the USDT for yield farming a new coin

All these things I mentioned are quite clear to anyone in cryptos why stable coins are more valuable but they probably make no sense to you

USDT to US $ to spending on goods and services is very easy and very quick but the reverse is not true

 

[Trader Curt]

This is what I don't get. Why is it, that USDT is the only stablecoin that always gets picked on? Why not USDC or BUSD or any other stable coin for that matter? Everyone acts like the only stablecoin out there is USDT, when in fact there are about 5 different stable coins to chose from. If you are insecure about USDT then just find another coin to use, PROBLEM SOLVED!! You don't see the FED printing 5 different types of FIAT. It would be cool as hell if they did, but they don't. They stick to 1, and that 1 is worthless.

 

[RedDuke]

This is what I don't get. Why is it, that USDT is the only stablecoin that always gets picked on? Why not USDC or BUSD or any other stable coin for that matter? Everyone acts like the only stablecoin out there is USDT, when in fact there are about 5 different stable coins to chose from. If you are insecure about USDT then just find another coin to use, PROBLEM SOLVED!! You don't see the FED printing 5 different types of FIAT. It would be cool as hell if they did, but they don't. They stick to 1, and that 1 is worthless.

USDC in particular is actually backed by real
Reserves and audited by very reputable firm. That is why they can not just print it out of thin air.

USDT, that represent 75 percent of daily crypto volume, is backed by like 4 percent cash, some made up commercial papers (based on crypto) and audited by 3 people firm in Maldives. And they print billions every other day. Though they slowed printing press a bit recently.

 

[johnarb]

This is what I don't get. Why is it, that USDT is the only stablecoin that always gets picked on? Why not USDC or BUSD or any other stable coin for that matter?

USDT has the most number of coins in circulation

In theory, USDT and USDC are equal as they are both stablecoins, but in practice, I noticed a wider spread when trading for USDC, especially on a dex and with a bigger amount per trade

I also get the feeling that USDC is more closely monitored. This should not be a problem if I'm not criminal but I wonder if the dex or the CeFi I traded with did not vet where the coins came from and I would have issues when trying to use on a US CeFi company. It is probably just in my head

USDT, that represent 75 percent of daily crypto volume, is backed by like 4 percent cash, some made up commercial papers (based on crypto) and audited by 3 people firm in Maldives. And they print billions every other day. Though they slowed printing press a bit recently.

Here's a video on real world usage of USDT, I started the video at the stablecoin discussion but the whole video is really good!

There's a section on options market for bitcoin which I might post on a different thread

Just click and watch for 5 minutes to see it from the points of view of actual people who use USDT, some not even caring or knowing they are using cryptos and may not have any interest in speculating on bitcoin or ethereum

 

[Trader Curt]

USDT has the most number of coins in circulation

In theory, USDT and USDC are equal as they are both stablecoins, but in practice, I noticed a wider spread when trading for USDC, especially on a dex and with a bigger amount per trade

I also get the feeling that USDC is more closely monitored. This should not be a problem if I'm not criminal but I wonder if the dex or the CeFi I traded with did not vet where the coins came from and I would have issues when trying to use on a US CeFi company. It is probably just in my head

The wide spreads are from a lower volume, which I bet the DEXs have the highest spreads. And if you know what you're doing, you can actually make profits just from stable coins alone. USDC just had a flash spike that sent it all the way to 5 dollars, which is insane!

 

[johnarb]

The wide spreads are from a lower volume, which I bet the DEXs have the highest spreads. And if you know what you're doing, you can actually make profits just from stable coins alone. USDC just had a flash spike that sent it all the way to 5 dollars, which is insane!

Wow, that is crazy! I would like to sell USDC into that frenzy, lol