Tether Now Holds Over $5 Billion Worth of Bitcoin to Back USDT (But Should It?)

schizo said:
But, from what I've read, every USDT token that's issued to the public is to be backed by an equivalent amount of fiat. This is, in theory, supposed to make USDT resistant to market volatility. But how is this possible when it's backed by Bitcoin? This is especially troublesome because the USDT they issue will ultimately be used to buy Bitcoin. So this would be a double whammy if the market ever crashes.
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completely wrong. Tether and other stables are not backed by just Fiat aka cash. They are backed by assets like treasury bills, and other assets
 
ph1l said:
Easy.
  1. Tether issues Tether tokens
  2. Tether uses the new Tether tokens to buy Bitcoin
  3. Now Tether is backed by Bitcoin

  4. Tether issues Tether tokens
  5. Tether uses the new Tether tokens to buy Bitcoin
  6. Now Tether is backed by more Bitcoin

  7. ...
What could possibly go wrong?:D
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This is 100% wrong. Maybe just do a little googling before you talk about what you heard.

The vast majority of tether is back by treasury bills, and other short term obligations like money market funds. This can actually be seen on their website if you just go and look. The amount of bitcoin compared to the other assets is very small. Plus, they also have gold and other precious metals which nobody seems to be talking about here. I don’t think you understand this at all
 
orbit23 said:
At the very beginning they claimed that for every tether, there is 1 USD in their bank accounts.

But then they were caught lying, and they had reserves only 25% of the time (in a period of 1-2 years).

That's what they received the sentence from CFTC and the settlement in the NYAG.

And back then, the Tether marketcap had been around $2B. Now it's more than $100B.


They have been promising a financial audit for 7 years. Why can't they produce one?

They are claiming that they have always been able to redeem the dollars. Their CEO at the time answered to the question whether can he guarantee the redemption at dollar value forever, he said "I can't guarantee anything, but i believe we will be able to."


I don't believe they are sufficiently backed. Their dollar peg is artificial. Just look at luna's UST. It would have collapsed a year earlier, but trading firms allocated money to restore the peg(so they could sucker more money out of the system)... The same goes for Tether in my mind.

They keep it pegged so the cash cow can be milked further. Don't kill the goose that lays golden eggs.

At some point though, it's likely to burst.
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you are completely clueless. Tether never said they are backed by dollars. They are backed by assets. Being able to sell the assets to produce dollars if somebody redeems is different than actually holding dollars. Think about it like a bank, when you have a bank deposit they don’t just hold cash for you. They typically make loans or buy bonds with that money and earn the spread. Tether does the same thing.

The confidence to just spout off shit without knowing anything about this business is honestly rather amazing.
 
However, the CFTC determined that at least from June 1, 2016 through Feb. 25, 2019, Tether misrepresented to customers and the market that it maintained sufficient U.S. dollar reserves to back every Tether token in circulation with the equivalent amount of “corresponding fiat currency.

The agency also found that Tether failed to disclose that it included unsecured receivables and non-fiat assets in its reserves, and that the company falsely represented it would undergo regular audits to prove it was maintaining the fiat currency reserves it needed to back Tether tokens.
 
GlobalMacro90 said:
you are completely clueless. Tether never said they are backed by dollars.
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Yes, they did.
upload_2024-4-2_10-15-13.png


Edit: Here is the proof:
https://web.archive.org/web/20190219054619/https://tether.to/
upload_2024-4-2_10-21-8.png
 
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GlobalMacro90 said:
The vast majority of tether is back by treasury bills, and other short term obligations like money market funds.
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You think. But since they're not audited, there's no good reason to believe it.
Even companies with audited financials get busted cheating (wirecard).
Without audits, you'd be a total sucker to buy what they're selling.
 
engineering said:
You think. But since they're not audited, there's no good reason to believe it.
Even companies with audited financials get busted cheating (wirecard).
Without audits, you'd be a total sucker to buy what they're selling.
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yawn. Nobody buys and holds tether it’s just a stable coin used between crypto transactions. But go ahead and keep letting your doubt stop you from bitcoins historically great returns. You are really killing it.
 
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