Tether - Unaudited For 6 Years/Rejects Auditor Because...

[johnarb]

https://cryptobriefing.com/tether-shares-assets-backing-usdt/

Tether doesn't hold much cash. The majority of it is cash equivalents which means you have external credit risk. So not only do you count on tether to maintain their assets, you also have to worry about what cash equivalents they hold.

What happens during a bank run on tether? If tether is backed, and stable, I should be able to convert 1:1 between tether and the underlying at any time (sans any conversion fees). An example of this in the real world is PSLV which will send you silver bars if you meet the minimum account value (1000 oz. iirc). You can be certain tether won't meet it's obligations and it's linked currencies will fall since tether is the most used currency to buy bitcoins. Demand for linked currencies shrinks because the stablecoin fails and the price falls. It's simple economics. "Exogenous variables" is the fancy fama-french term.

EDIT: There's no need to redeem Tether to get your US $. Simply trade the USDT for US $ at any exchange and use the exchange's wire transfer method to wire US $ to your bank account

I am not ignoring all your concerns and others have said the same thing, in one form or another. RedDuke has mentioned similar points on many occasions

I posted about the counter arguments and even posted a video on how much Tether is trusted in Asia

Tether value has become a matter of faith.

1 Tether is worth 1 US $. Everyone believes it, and thus becomes so

I hold over six figures amount of Tether. Am I worried of a bank run on Tether. Nope, not really

Others of course hold more. Some are holding 7, 8, or 9 figures of Tether. They should be more worried than me

I am worried of a possibility that (US or other) regulators will shutdown Tether, hence I hold much more US $ cash in banks than I hold Tethers

After all, Tether is becoming a US $ reserve currency in the cyprtos world while not being controlled or issued by the US Government

So wrt the real US $, I put up with the non-24 hour traditional banking system, or the issues such as making a debit card purchase (bank card transaction, money is in the bank, not a CC) of over $5K denied and having to call support while at the store

Big transactions on Tether and cryptos are a normal occurrence and takes place 24/7

"Tim Massad worried today that a redemption wave would cause USDT to plunge, "breaking the buck" like the Reserve Fund in September 2008. Problem is USDT never gets redeemed. Circulating supply never goes down. Not crypto winter (2019) , not March 2020, not last month."

A good thread on Tether below

https://twitter.com/x/status/1399947298268925953

 

[Pekelo]

Now speaking of those DeFi and whatever contracts yielding 8% APY, just how long can that be sustained? Madoff did 10% for 20 or so years and we know how that ended and what was it based on...

 

[johnarb]

Now speaking of those DeFi and whatever contracts yielding 8% APY, just how long can that be sustained? Madoff did 10% for 20 or so years and we know how that ended and what was it based on...

DeFi yields are based on supply and demand, and unfortunately, yields are very low currently, due to more supply. Confusing, huh?

Supply (or deposits) of Tether on DeFi platform AAVE is high compared to demand (borrowing of crypto traders to use for buying more bitcoin or eth, basically, like margin trading)

Why is supply of Tether high?

Because cryptos people sold bitcoin and other crypto digital assets for Tether and other stablecoins, rather than fiat currencies such as US $

As others point out, trading volume of bitcoin is 75% Tether, which is true whether bitcoin is going up or going down, I'd imagine it's even higher during selloff since sellers prefer USDT

These people holding Tethers would rather get a low yield than no yield so they deposit on AAVE

You want 8.88% APY on Tether? You'll have to go to one of the CeFi platforms like Celsius Network which make their money via prime broker business

When dealing with CeFi, you'll need to make sure you're not a money launderer, a criminal, or a terrorist as they will have AML/KYC requirements for parking your 1M of USDT

It's best to contact them if you're going to deposit a large amount to get everything squared away prior to making the deposit. They have an office in NY and London

https://celsius.network/earn-rewards-on-your-crypto

 

[Pekelo]

So where exactly this 8% APY is coming from? Can you explain it like I am 5? Because it sounds like a pyramid scheme to me.

 

[clockwork71]

So where exactly this 8% APY is coming from? Can you explain it like I am 5? Because it sounds like a pyramid scheme to me.

This I think is the biggest problem w/ all of this. It's too clunky at the moment.

Here is what is going to happen: The Fed will release FedCoin. A majority of people are going to use it. Why? Because it will be accepted everywhere, and will behave very much like transactions do right now. The argument about the time of transfer isn't relevant to people about 99.99% of the time. Most transactions are something like walking into a store and buying a product. I swipe my Visa debit card, and walk out. No need to figure out what is going where, or what coin I need to use. It works, and in the end - that's all people care about.

Crypto is a lot like other Silicon Valley products. It is a solution looking for a problem. I do like smart contracts though. That's where the real value comes from down the line I believe.

The one thing that all of the evangelists that tell us that 'we don't get it' always overlook is that they need us to make it work. Aunt Millie is not going to be bothered. Aunt Millie may not be the smartest of all people, but she is a majority of them. I have no fucks to give about switching from one exchange of medium for another because retailer A uses Redcoin while retailer B uses Bluecoin.

Crypto is for one thing right now, speculation. That's fine, but let's be honest about it. I have made a little money here and there, but have never once thought about using it for anything. In fact, I have a hard time thinking of when I would actually spend it.

If I did, and something went wrong - can it be recovered? No. I can at least go choke out the teller who messed up my transaction.

 

[RedDuke]

So where exactly this 8% APY is coming from? Can you explain it like I am 5? Because it sounds like a pyramid scheme to me.

paying 8 percent in Monopoly money is no big deal. Paying 8 percent in fiat for doing absolutely nothing is a big deal. Tether wonder land might pay 10 percent or more, why not, it is magical…

 

[mlawson71]

Whatever happened to the old reports that Tether was used to manipulate Bitcoin's price? Has anything come of it at all?

 

[RedDuke]

Whatever happened to the old reports that Tether was used to manipulate Bitcoin's price? Has anything come of it at all?

it is not old and is happening in front of our eyes. The recent change is that over last month, they stopped printing it. No idea why.

 

[Nobert]

Whatever happened to the old reports that Tether was used to manipulate Bitcoin's price? Has anything come of it at all?

You people move around 50 miles in order to avoid simple basic questions, while burying those over a pile of non related information and ,, facts " from biased pages.

A typical behaviour of a fool/fanatic/scammer/sociopath.

 

[virtusa]

paying 8 percent in Monopoly money is no big deal. Paying 8 percent in fiat for doing absolutely nothing is a big deal. Tether wonder land might pay 10 percent or more, why not, it is magical…

And as long as crypto's go up, nobody will ever sell any of them as they would be afraid to miss the next big move up (FOMO). That's the reaction scammers need.
Only when people start to sell their coins the whole scam can collapse as there will be a run on the crypto bank. But as the crypto bank does no exist and crypto's are pure air, it will be fast and hard game over.