Tether: What part of this balance sheet do we not believe?

[Cryptjitsu]

everyone turns blind eye because BTC got to 69k only due to fake trading, same for NFTs.

Moreso relevant in 2017 rather than 2021.
There is a whole investigative report that tracks down USDT & BTC movements to show how BTC was manipulated up to 20k by essentially a couple of major whales. Primarily using Binance & Bitfinex.
BTC community has a very heavy investment in Tether staying "solvent" at least until there is a good alternative or replacement. Most of crypto does, especially if you actively use CEXs. Most USD trading pairs are in USDT, it is also the key infrastructure for moving funds around. Very similar to the value of USD infrastructure in global finance even though EVERYONE hates USD and USA is printing money and blah blah blah.
My guess is official CBDCs will simply take over & replace Tether.

 

[RedDuke]

That is true and that the cost of the massive upside in the crypto markets.
At the same time, the big players have a heavy incentive in keep Tether stable.
You might as well consider Bitfinex & gang as the FDIC for USDT.

Also, FDIC can't cover most of the banks simultaneously, they dont have the funds. So what you are basically saying is that it's ok that every bank is insolvent by design because good old government.
Everybody plays along because a massive run on the bank scenario is mutually assured destruction.
It is the same thing with Tether.

the difference is that bank run legit business where Tether is a fraud that never produced a single audit.

 

[Cryptjitsu]

the difference is that bank run legit business where Tether is a fraud that never produced a single audit.

What Tether does is just an extension of the Eurodollar banking system, aka "shadow banking" They take USD based assets and rehypothecate them into USDT. It is essentially leverage on actual USD currency units.
All of this is essentially an evolution of fractional reserve banking.
Hence my general point

The legit bank business you speak off can pass an audit but the reality is that if even 20% of the depositors went to withdraw their money, their books collapse and here come the Feds to take it over. So, does it even matter? Everyone just plays that game.
Same happens for Tether. USDC gaining market share is the biggest risk for USDT, not the actual "fraud"

 

[RedDuke]

…… They take USD based assets and rehypothecate them into USDT. ……

There lies the issue. If that is what they actually did, they would have no problem passing and audit.

the fact is that there were caught lying of several occasions, including having commercial paper (just Google Bloomberg research on this topic)

the reality is that they create USDT out of thin air with nothing backing it, and therefore of course can not pass any legit audit.

 

[The_Krakenite]

If more finTechs like PayPal continue to create stable-coins, it is possible we can get a softer implosion from the Tether bubble. It won't de-fuse it, and in fact, it may actually catalyze ground-zero. However, the more (legit) stablecoins going around, the lesser damage Tether will unleash when the run through the exits begins.

Tether is going to be similar to watching those WTI oil contracts go not just to zero, but deep into negative territory all over again. The interesting things that happen when everyone runs to the exits at the same time.

Interesting note: Many days before THAT disaster, an important bulletin had been sent to all brokers dealing in WTI contracts warning this was a possible tailed event that may occur, and to be prepared for it in case.

Yet there were some brokers who chose to still ignore it.

We are doomed it seems to repeat that same type of disaster with Tether.

 

[Cryptjitsu]

There lies the issue. If that is what they actually did, they would have no problem passing and audit.

the fact is that there were caught lying of several occasions, including having commercial paper (just Google Bloomberg research on this topic)

the reality is that they create USDT out of thin air with nothing backing it, and therefore of course can not pass any legit audit.

Commercial paper is a USD based asset. Even if they are taking Evergrande paper, as long as it's denomiated in USD, it is a USD based asset.
They are supposed to have LIQUID USD for every USDT, but it is very clear they do not and never have.
Just like your local bank which we assume to be solvent with what our balances show on the screen but that is simply not true.

Nothing new here, it's just part of the game.

 

[RedDuke]

Commercial paper is a USD based asset. Even if they are taking Evergrande paper, as long as it's denomiated in USD, it is a USD based asset.
They are supposed to have LIQUID USD for every USDT, but it is very clear they do not and never have.
Just like your local bank which we assume to be solvent with what our balances show on the screen but that is simply not true.

Nothing new here, it's just part of the game.

you must have not read Bloomberg article. Commercial paper world is very small. Based on Tether size they would be among top holders in the entire world. Bloomberg called every major bank and non ever saw them trading even a single commercial paper.

that is how their fraudulent claim about commercial paper was exposed. Then one day they just claimed they told all 60 billion of it. And no one saw a single trade again.

you do the math here.

 

[Cryptjitsu]

you must have not read Bloomberg article. Commercial paper world is very small. Based on Tether size they would be among top holders in the entire world. Bloomberg called every major bank and non ever saw them trading even a single commercial paper.

that is how their fraudulent claim about commercial paper was exposed. Then one day they just claimed they told all 60 billion of it. And no one saw a single trade again.

you do the math here.

No I have not read that article, am curious but also doubt I will be surprised.
Business as usual for Tether. It's been run by blatant crooks from day one and the crypto world, as whole, fully accepts it and even enables it. BTC Maxis LOVE Tether.
So who is gonna pull the trigger? Thats the real question.

Ive done the math, a while ago. Tether takes the games of trad fi and turns them up to another degree.
Im just saying it's all relative and not that different from your local, regional and big banks, as well as central banks.

The "fraud" can go on longer than anyone thinks.

 

[The_Krakenite]

What I couldn't possibly predict, was the level of stupidity by millennial investor/traders. After the fallout of FTX, and Terra, it was a no-brainer that people SHOULD learn their lessons and avoid shady shit. Tether should have no market-cap by now...

But... no. The very same idiots who scream and yell how they got frauded by Sam Bankman, seem to still not want to bat an eye at Tether, even when it's staring at them right in the face. There is a definition out there for insanity. I invite these idiots to look it up and see if it rings any alarm bells.

With that said, I've been wondering lately. Investing in PayPal to get equity into their stablecoin may pay off huge when Tether implodes and there is a huge demand for a working stable while the big exits have shut off?

The problem, PayPal's cash-flows have been stagnant for the last decade or so. This means your investment is just dead-money and waiting for a catalyst to swing in your favour.

One plan I had was to short PUT-LEAPs recently for PayPal. Lots of good premiums out there for them. However, one thing that has held me back is the recent upgrade of Fed Now. That's definitely a big dent in FinTech's armour.

 

[johnarb]

After the fallout of FTX, and Terra, it was a no-brainer that people SHOULD learn their lessons and avoid shady shit. Tether should have no market-cap by now...

Lots of brain-dead posters on here commenting about Tether when they have no idea of the SCALE of its GLOBAL business

Tether USDT settled over 7 TRILLION USD value on-chain last year. This is not counting Tether-crypto trading volume

I know someone who who purchased a vehicle worth over US $30K here in Asia using mostly Tether

There is a reason PayPal wants in on the stablecoins business

...and USDC crashing in marketcap while Tether USDT is at all time high should provide a clue on what the market thinks of Tether...