Tether collapse journal

Many, many months back I made posts about Tether and the huge danger it imposed to the system. Very few seemed to listen and the majority considered it FUD.

Seems suddenly most people are signing a different tune now. That's progress...
 
The_Krakenite said:
Many, many months back I made posts about Tether and the huge danger it imposed to the system. Very few seemed to listen and the majority considered it FUD.

Seems suddenly most people are signing a different tune now. That's progress...
More...

I have been sain this for years. So far I was wrong, but we will see this one out one way or the other.
 
Tether USDT is the biggest stablecoin, it's going to be fine, people thinking sky is falling has been saying that for years

Checkout the daily volume

https://coinmarketcap.com/currencies/tether/markets/


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johnarb said:
Tether USDT is the biggest stablecoin, it's going to be fine, people thinking sky is falling has been saying that for years

Checkout the daily volume

https://coinmarketcap.com/currencies/tether/markets/


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I disagree with this line of thinking. Just because it's big doesn't mean it can't collapse. High liquidity is good, but nothing will save from a "bank" run.

The only benefit it has is that it's peg is behind a curtain, not like Luna which had its mechanism on full display, and hence open to exploit. We only know that the Tether peg holds as long as it doesn't run out of dollars for redemption. Maybe if another 20B wanted to redeem for USD, would that be enough for them to not be able to pay? Paying out the 10B recently was impressive, but how close were they to not being able to meet further redemptions.

Even an investment fund obviously cannot liquidate 50% of their holdings in one day if need be, so I don't expect the assets of Tether to be able to be converted to 30B cash in one day, but if we get to a point where enough people want USD and tether has to delay redemption, it can get very bad and very quickly.
 
Tether USDT is the biggest stablecoin
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That's the worry.

I think it's best to put my dividends into REITs for now every month, and sit and wait for another downward catalyst like the tethercollapse. Then bargain-buy more ETH once the last of the paper-hands have sold out and the die-hards have been liquidated on over-leveraged margin.
 
NoahA said:
I disagree with this line of thinking. Just because it's big doesn't mean it can't collapse. High liquidity is good, but nothing will save from a "bank" run.

The only benefit it has is that it's peg is behind a curtain, not like Luna which had its mechanism on full display, and hence open to exploit. We only know that the Tether peg holds as long as it doesn't run out of dollars for redemption. Maybe if another 20B wanted to redeem for USD, would that be enough for them to not be able to pay? Paying out the 10B recently was impressive, but how close were they to not being able to meet further redemptions.

Even an investment fund obviously cannot liquidate 50% of their holdings in one day if need be, so I don't expect the assets of Tether to be able to be converted to 30B cash in one day, but if we get to a point where enough people want USD and tether has to delay redemption, it can get very bad and very quickly.
More...

USDT and UST are vastly different

Not everyone who holds USDT are allowed to get USD from Tether Co. In fact, most of the USDT tokens are in wallets that are not redeemable for USD

For regular folks like us, we can go to Coinbase to convert USDT to USD

Ok, let's wait and see if USDT collapses as the thread is suggesting
 
I still don't get the stable coin concept. What would motivate anyone to put billions of $ to supposedly "back" a coin that would other wise be...unstable? Who mines Tether? Where do the fees go? Are there even fees? Do two people mine it? And why is this backing so important? Oh, I can convert my stable to the asset backing it? Is this conversion super easy or something? How is that conversion better than what I've got, with the ability to go back and forth between my bank account and crypto exchanges/wallets? Is the backing really what makes it "stable"? Why doesn't Elon Musk buy and back Tether if it's such a good idea to put up billions for a crypto coin? If someone put a 5 trillion, would Bitcoin suddenly become stable? Why can't any alt coins be made into a "stable" with "backing".

I still call BS in the whole thing till I hear some plausible explanations.
 
Good1 said:
I still don't get the stable coin concept. What would motivate anyone to put billions of $ to supposedly "back" a coin that would other wise be...unstable? Who mines Tether? Where do the fees go? Are there even fees? Do two people mine it? And why is this backing so important? Oh, I can convert my stable to the asset backing it? Is this conversion super easy or something? How is that conversion better than what I've got, with the ability to go back and forth between my bank account and crypto exchanges/wallets? Is the backing really what makes it "stable"? Why doesn't Elon Musk buy and back Tether if it's such a good idea to put up billions for a crypto coin? If someone put a 5 trillion, would Bitcoin suddenly become stable? Why can't any alt coins be made into a "stable" with "backing".

I still call BS in the whole thing till I hear some plausible explanations.
More...

Stablecoins are the equivalent of the invention of the wheel in moving forward the Cryptos assets into a true financial system

Before stablecoins (oh the good ole' days) there were always price differences among different global crypto exchanges, Huobi, Okex, BTCChina, and of course Coinbase

Even in the early days when there were not enough USDT in circulation or there was not enough trust in them, arbitrages existed fairly often, especially among the obscure tokens of pre-2018

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Imagine if you will Bitcoin is trading at $31,000 at Huobi and $30,000 at Coinbase

You're a crypto trader at Sequoia. Do you just wire $200M to Huobi and Coinbase so you can perform the arb trade?

How long does the wire transfer from your banks take to reach both exchanges?

Now imagine doing the same thing with stablecoins USDT

kimchi premum was delicious

Sam Bankman-Fried got started to becoming a billionaire doing these stuff

https://protos.com/bankman-fried-curliest-crypto-billionaire-etfs-bitcoin-japan/
 
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