Hacker News Re-Imagined

Tether starting to lose its peg too, after Terra did

  • 823 points
  • 12 days ago

  • @EGreg
  • Created a post

Tether starting to lose its peg too, after Terra did


@nevi-me 12 days

Replying to @EGreg 🎙

This will be a defining moment for stablecoins, and will test whether Tether is truly backed by liquid assets to the $80bn equivalent.

The UST collapse will accellerate regulations, with Ms Yellen already commenting on stablecoins. More regulations will force USDT to show its hand with its assets, likely proving that it's technically insolvent.

That will collapse it.

What about USDC? As long as they act ethically, they need 1 'physical' dollar to mint 1 USDC. If USDT is backed by mostly air, then the USDT > USDC migration can't happen without actual reserves changing hands.

This likely means a crypto collapse, as more people will learn that value < money.

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@seydor 12 days

Replying to @EGreg 🎙

I don't know why i think it is a good thing that these ambivalent coins are being extinguished? It is catharsis to realize that bitcoin cannot be compatible and coexist with legacy fiat systems

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@jqpabc123 12 days

Replying to @EGreg 🎙

The sad reality is that many poorer and financially illeterate people have been tricked by VCs and other grifters ...

The sad reality is that many poorer and financially illiterate people have become partners with the grifters by preaching the crypto religion to anyone who would listen --- knowing that every new convert would likely do the same and help push their own crypto assets higher.

This is nothing new --- it is the same marketing scheme that religion has been using for centuries.

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@chriswd 12 days

Replying to @EGreg 🎙

I don't think it's losing its peg, but who knows... Everything is so crazy right now.

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@sdgdfgsfdfgsdfg 12 days

Replying to @EGreg 🎙

It will probably go down like this:

Tether inevitably drops to $0, evaporating in the order of $100B of funny money. Crypto market collapses, trading is halted on the large platforms, big exchanges go bankrupt.

This shocks the regular markets to a significant degree. Calls for strict regulation will follow, ending the state of crypto as we know it today.

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@topper-123 11 days

Replying to @EGreg 🎙

Stablecoins must be the must crazy investment in the modern era, right after NFTs: by buying them, you’re essentially betting that the stablecoin can maintain its peg. By not buying them and keeping dollars, you get the same outcome except safer.

It’s just nuts.

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@jallen_dot_dev 12 days

Replying to @EGreg 🎙

If Tether is backed, then Bitfinex could buy currently-discounted tethers off the market and redeem them for face value, pocketing the difference. The fact this is not happening means they really don't have the money, do they?

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@dudeinjapan 11 days

Replying to @EGreg 🎙

Don't worry guys. Tether is backed by secret sauce.

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@anm89 12 days

Replying to @EGreg 🎙

Watching this in real time. Crazy. Currently at .97.

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@robinjhuang 12 days

Replying to @EGreg 🎙

Rat poison squared. Buffet was right.

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@ineedasername 12 days

Replying to @EGreg 🎙

USDC volume is up 50% right now and even hit a 6-month high in value. Either Coinbase is doing extremely large $$$ of preemptive defense or people are flocking to a stablecoin with a more trustworthy backer whose collateralization claims are less questionable.

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@DebtDeflation 12 days

Replying to @EGreg 🎙

https://finance.yahoo.com/news/tether-reduced-exposure-comme...

The CTO of Tether issued a statement earlier today stating that Tether has significantly reduced its exposure to commercial paper and now holds the majority of its reserves in US Treasuries. That should be super easy to verify, yet he refuses to release any details, saying to just wait for their next quarterly update on reserves (which in the past has just been a one pager someone typed into Excel).

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@superkuh 12 days

Replying to @EGreg 🎙

These traditional finance scams aren't cryptocurrencies. These are normal financial world shady dudes dressing up their scams in cryptocurrency jargon and buzzword to attract marks.

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@thematrixturtle 12 days

Replying to @EGreg 🎙

It's hard to overemphasize how big a deal the Tether peg breaking would be (is?). At $78B, it dwarfs UST/Terra, and it's supposed to be an asset-backed stablecoin, not a risky algorithmic boondoggle like UST. If Tether plunges, it will take the broader crypto markets with it.

Emphasis on the "supposed to be", since many, many, many unanswered questions have been raised about Tether's reserves and they've previously been caught straight-up lying about them.

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@nailk 12 days

Replying to @EGreg 🎙

Tether didn’t lose its peg. It’s redeemable at $1 via Tether’s site as usual. The market price difference is making arbitrageurs more rich, that’s all. These headlines are FUD.

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@crocwrestler 11 days

Replying to @EGreg 🎙

I'm feeling pretty smug right now, not gonna lie. I have tried to keep an open mind about crypto, but generally the arguments I've encountered for crypto have boiled down to "you just don't get it" and said by people with a huge vested interest in crypto.

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@randomsearch 12 days

Replying to @EGreg 🎙

This isn't just about Tether, this is it.

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@mrhektor 11 days

Replying to @EGreg 🎙

Is what's happening comparable to a bank run? Tether didn't have a 1:1 ratio with USD, and suddenly everyone is trying to liquidate? That seems to be the most simple explanation.

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@FatalLogic 12 days

Replying to @EGreg 🎙

That looks bad. The worst previous fall of Tether/USDT was down to about $0.90 in mid-2017, during which it was substantially below $1.00 for over a month

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@ineedasername 12 days

Replying to @EGreg 🎙

As of 12:15:00 UTC it's back to $0.99. People in the US are just starting to hit their computers though so it will be interesting to see what shakes out there on the news it slid so much earlier in the morning.

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@Canada 12 days

Replying to @EGreg 🎙

My prediction: Tether is not losing peg.

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@rswail 12 days

Replying to @EGreg 🎙

So let me get this straight:

There are bitcoins. They get mined and etc.

There is ethereum, it processes transactions and people pay for the processing with "gas". Gas is ETH. ETH need to be mined and etc.

This could all happily work in a self-contained world, where there's no actual underlying assets reflected in BTC or ETH. But that's not "real" as in, gains/losses can't be turned into fiat currency, which is the government approved way to pay taxes and debts.

So now someone wants to be able to convert BTC/ETH/XYZ/ABC into USD (or AUD or CAD or etc "trusted" fiat currencies).

So the stablecoin is created, supposedly backed 1:1 with fiat USD. However, there's only vague assertions that this is correct and none of the bank regulation that ensures that banks actually are backed.

That stablecoin, Tether, is unaudited and no one actually knows what it holds. But for some reason, people "trust" it.

Now there's another "stablecoin" called Terra, which isn't backed by any assets in the real world. It's entirely "backed" by the fact that it can be converted "freely" into Lunas.

For an even more abtruse reason, people were "trusting" Terra.

Then the tide went out and Terra/Luna is actually naked.

Now that has focused attention on Tether and people are testing it. Because Tether has real assets, it can (for now) convert at 1:1. But it has artificial limitations on that conversion, limiting it to a minimum of USD100K.

So unless you have 100K of Tether, you're relying on finding some other buyer of it if you want to sell. People are desperate to sell, so the "price" of Tether is dropping relative to its USD peg.

Someone is buying that Tether on the market, accumulating at least 100K and then going to tether and converting to real USD.

But Tether have put a whole bunch of artificial time restrictions on that conversion, which means that the tide hasn't gone out yet.

When it does, either Tether does have 1:1 backing of all the Tether out there, in a way that can be easily liquidated so that it can pay out, or it won't, and the "peg" will collapse.

When that happens, anyone holding Tether is left holding the bag.

And that means anyone that had BTC "backed" by Tether is out of luck, so is anyone with ETH, or any of the other endless coins out there.

So the whole thing collapses, those that get out early and convert to fiat will be rich and everyone else screwed.

Gee, sounds like a standard bank run but with extra steps and without the Fed.

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@lvl102 12 days

Replying to @EGreg 🎙

(1) Tether is probably skimming a few percentages off of top trying to charge people for the run.

(2) It might not and this is the beginning of the end. And I am so glad it is finally here. I am so sick of crypto.

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@nly 12 days

Replying to @EGreg 🎙

Part of me wonders if this is just speculators getting confused between the UST and USDT symbols.

There are a lot of dumb and careless people trading in this world

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@imron 12 days

Replying to @EGreg 🎙

I'm not sure the situation is comparable to Terra.

If you can't read the Y-axis on a graph, and you only look at the last 7 days, then it looks like Tether has gone off a cliff.

If you read the Y-axis you'll see it's barely moved, and if you zoom the graph out, it's barely a blip compared to previous deviations in price.

Now it may well be that Tether is also heading to zero, but it's very different from the Terra fluctuations.

Check the following graphs for both 7 days and all time

0: Tether https://coinmarketcap.com/currencies/tether/

1: Terra https://coinmarketcap.com/currencies/terrausd/

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@makoto12 12 days

Replying to @EGreg 🎙

crypto noob over here, i'm a bit confused with all the noise i'm seeing, if someone could explain.

I'm hearing that Tether is still honouring $1 withdrawals, over a certain amount i think $100k.

What's stopping me from buying 100K in tether at 98c, for $98k and then redeem it from Tether at $100k, making $2k with zero risk?

Surely i can't do that because that would autocorrect the price back to $1 ?

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@fbrncci 12 days

Replying to @EGreg 🎙

The moment I've been waiting for way too long. Here's to me hoping that this entire thing will blow up, and that all the Tether predictions have been true since the very start.

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@KoftaBob 12 days

Replying to @EGreg 🎙

What exactly is the point of stablecoins that are pegged to the USD? Why wouldn't I just accomplish the same function with an actual USD?

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@rvz 12 days

Replying to @EGreg 🎙

   Unsurprising. [0][1]
How are the people who bought BTC at $69K 1 year ago with their life savings?

[0] https://news.ycombinator.com/item?id=30057769

[1] https://news.ycombinator.com/item?id=27206314

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@ouid 11 days

Replying to @EGreg 🎙

Tether is an unregulated, uninsured, bank

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@rinze 12 days

Replying to @EGreg 🎙

I'll just repeat r/buttcoin's mantra:

This is good for Bitcoin.

Get the popcorn, we're in for a ride (I hope.)

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@NavinF 12 days

Replying to @EGreg 🎙

“Will Tether collapse by the end of 2022?”: https://www.metaculus.com/questions/9121/tether-to-collapse-...

Community Prediction: 33%

My Prediction: 50%

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@turtledove 12 days

Replying to @EGreg 🎙

You love to see it happen. Truly love to see it.

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@Nursie 12 days

Replying to @EGreg 🎙

So the most interesting thing to me, here, is that a lot of exchanges seem to denominate in USDT, not USD. And the BTC price is currently different between the two on exchanges that have both -

https://trade.kraken.com/charts/KRAKEN:BTC-USD https://trade.kraken.com/charts/KRAKEN:BTC-USDT

I wonder how long it'll take things to ripple through the ecosystem if the price of tethers continues to be other than $1.

(edit - and I may be wrong, but it looks to me like the USD price is following the USDT price by approximately that offset, so as tether regains some of its peg, the USDT price doesn't move much, but the USD price heads back up towards it. Feels like the tail wagging the dog..)

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@ineedasername 12 days

Replying to @EGreg 🎙

Let's put on some tinfoil hats & speculate a bit: What groups might have the resources to attack the peg on UST & USDT? Is anyone out there bragging about the $$ they're making by demonstrating that these coins aren't quite so stable? (Personally I have no idea, and wouldn't even know where to look to find chatter about it, hence the question)

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@sdgdfgsfdfgsdfg 12 days

Replying to @EGreg 🎙

Arbitrageurs putting up buy walls at 0.98. Just wait until they ate up Tether's liquidity.

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@t_mann 12 days

Replying to @EGreg 🎙

The one thing that I can't wrap my head around with Tether is: where did it all go? Tether must have been paid tens of billions in fiat dollars, and not even their bankers can say where those are. There's only so many hundred millions you can put into villas, cars, yachts and parties before it's inconceivable that it wouldn't get noticed.

When it comes to crypto overall, my impression is that it needs to get bad before it can get good. There are benefits to being able to make binding promises to strangers using open source software, but I see that more as a public benefit than as something to become ultra rich on. BTC, and with it all crypto, MCAP grew massively on the back of largely non-existent funds (Tether), and that's the part that needs to go.

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@edem 12 days

Replying to @EGreg 🎙

Dai and USDC is trading at a premium. The market is deciding which ones will survive.

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@WXLCKNO 12 days

Replying to @EGreg 🎙

Since when are links to random forum posts allowed for this type of stuff?

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@nathias 12 days

Replying to @EGreg 🎙

Well there won't be a better time for the enemies of crypto to attack USDT, but I don't think it's going down now.

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@LeoPanthera 12 days

Replying to @EGreg 🎙

To follow the price in real time: https://pro.coinbase.com/trade/USDT-USD

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@eru 12 days

Replying to @EGreg 🎙

The linked discussion is pretty inane, and sadly doesn't display much knowledge of monetary history.

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@voz_ 12 days

Replying to @EGreg 🎙

I love watching the bubble collapse.

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@helsinkiandrew 12 days

Replying to @EGreg 🎙

Matt Levine characterised these schemes as

> The basic structure of the trade is (1) Ponzi, (2) acceptance, (3) diversification, (4) permanence

But it seems backing it with a virtual currency that can go to zero and diversification with another virtual currency wasn't a sound plan.

https://www.bloomberg.com/opinion/articles/2022-05-11/terra-...

Crypto has become forever mired with the worst parts of banking and none of the benefits of currencies backed by entities with reserves that have value, and supported by laws, taxes, and large militaries.

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@xwdv 12 days

Replying to @EGreg 🎙

Many people killed themselves after Terra lost all value and I can only imagine many more will follow when Tether goes to zero.

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@gigatexal 12 days

Replying to @EGreg 🎙

Anyone who thought tether coins could work out without the banks backing the fiat actually doing the tethering was misled at best.

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@galuggus 12 days

Replying to @EGreg 🎙

"Only when the tide goes out do you discover who's been swimming naked."

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@adhesive_wombat 12 days

Replying to @EGreg 🎙

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is, then you deserve to lose your (real) money to some crypto VCs on an island somewhere.

And this doesn't only apply to crypto, look at how many countries with currency pegs can maintain that when their economy turns down, and then look at how many people actually seek to own the currency at that point rather than a currency backed by something (like a gigantic economy).

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@nikanj 12 days

Replying to @EGreg 🎙

Look at the front page of https://coinmarketcap.com/

There are 10114 different coins listed. Even if cryptos will deliver on the promises of the fully decentralized future, are we going to need that many different instruments?

Today practically all merchants takes Visa and Mastercard. Some even take Amex, and a minuscule amount take BTC. Does anyone take a coin from page 73 of coinmarketcap.com?

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@throwxxxaway 12 days

Replying to @EGreg 🎙

I don't have much understanding about Tether/Crypto.

You can go to Tether and they will give you 1 dollar for 1 USDT?

Then, who was selling 1 USDT for $0.95 ? Why didn't those people juts go to Tether and get 1 dollar for 1 USDT?

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@davewritescode 11 days

Replying to @EGreg 🎙

This demonstrates my biggest issue with the crypto ecosystem in general. We've combined financial complexity, technical complexity and a lack of regulation and created a fruitful environment for scammers and con-artists to run amok. 99%+ of crypto investors have little idea how the system works on a financial or technical level and it's one of the reasons I've personally avoided it.

I probably have reddit comments from years ago pinning Tether as a major risk to the entire bitcoin ecosystem. If you can't reliably move bitcoin to and from USD then Bitcoin's utility starts to rapidly approach 0.

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@Barrera 11 days

Replying to @EGreg 🎙

The actual article has the completely different title "What backs a currency? Terra Luna drops nearly 100%"

It's from a forum shilling yet another token experiment ("Intercoin"). Zero source material presented. Zero analysis. Zero value to those who don't care about Intercoin.

This article is of abysmal quality. I do appreciate the emotions the headline induces. But if it's information ye be after, this ain't the place.

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@oars 12 days

Replying to @EGreg 🎙

I wonder what Tesla executives think of the $1b in Bitcoin they own.

Would their risk committee have pushed them to sell it all if USDT behaves like this?

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@fastball 12 days

Replying to @EGreg 🎙

Watch the sell orders rack up in real time: https://ftx.com/trade/USDT/USD

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@hypertele-Xii 11 days

Replying to @EGreg 🎙

Tulip mania. See also: Cryptocurrency.

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@artdigital 12 days

Replying to @EGreg 🎙

Anything on any market can shift its price to the red or green. Tether and USDC are just tokens, so if there is enough sell pressure and not enough liquidity, the price on an exchange can jump to something else than $1. They are not fixed at a static $1.

It's actually almost never exactly at $1 and the reason why it's immediately pegging back to $1 is because there is an arbitrage opportunity, assuming there is enough backing so that in the worst case the custodian would just buy back the tokens for exactly $1, no matter what the market price is.

Seeing USDT at 0.97 temporarily doesn't mean much more than there is an insane amount of money exiting right now. One exchange can quickly fall to something like 0.97 if there is not enough buy power closer to $1

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@m12m3kg 11 days

Replying to @EGreg 🎙

Funny to see such a post from a project with a whitepaper that starts with "It enables communities around the world to issue and manage their own currency-as-a-service (CaaS), to circulate among their local population. This leads to stronger communities, greater sustainability, less poverty, and more productivity."

Does intercoin cure cancer?

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@Animats 12 days

Replying to @EGreg 🎙

Tether is back up to around $0.98, but volume is high. Somebody is pouring cash into Tether to support the price.

Similar over at UST. Price is back up to $0.60, but volume is far above normal.

Remember, with a stablecoin, there is no upside to holding. Any indication of risk means it's time to get out. Even if Tether has enough reserves to get the price back to $1, there will be substantial cashing out.

That's why a stablecoin has only two stable points: 1 and 0.

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@mouzogu 12 days

Replying to @EGreg 🎙

Load ze tether fud. I'm no fan of USDT, and don't hold it but the same thing happened in the May 2021 crash. I think it's just the high volume of people selling right now cause it to depeg.

I think if it goes too far below you will see the major exchanges go into "maintenance mode" since they're all deeply invested into keeping it alive.

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@carlosdp 11 days

Replying to @EGreg 🎙

This title is... wrong.

It's entirely normal for stablecoins to fluctuate in minor ways like this [1], even USDC (which is literally backed by actual US dollars in a bank account) fluctuates +- 1 cent regularly. This is because these prices come from a variety of exchanges trading these currencies, with different supply pools.

Arbitrage remediates this very quickly (Tether, at time of writing, is at $1.00). Not defending Tether, it's backing is definitely sketchy, but there's no indication it's in trouble at the moment, and this being on the front page is incredulous to me since it seems to be just some random dudes pulling up Google Stocks and speculating?

[1] https://www.coingecko.com/en/coins/tether (look at 14d window)

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@matt321 12 days

Replying to @EGreg 🎙

They created billions of coins and offloaded them for 1$ each and then they allow the (or cause) the price to plummet. How is this not a rug pull?

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@sgt101 12 days

Replying to @EGreg 🎙

What's the bullshit about auditors and Lehmans? Lehman's assets ended up being more valuable than expected after it went bust. What killed it was that it ran out of cash because it hadn't provided for the market conditions that cropped up . Discarding the utter nonsense that Goldman's were on about (7 sigma market shift my arse) this was in the class of understandable accidents. The problem is/was that these understandable accidents can't happen to institutions that are systemically important.

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@EVa5I7bHFq9mnYK 11 days

Replying to @EGreg 🎙

Tether occasionally fluctuates within 0.96-1.04 range, you can see that today at 7am it was at 1.03. The poster was able to catch a rare short lived moment when it dipped to 0.98. This is just bad faith propaganda.

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@bagels 12 days

Replying to @EGreg 🎙

If I expect it to go to 0, what is the play? I asked how to short tether years ago and didn't find any answers to act on.

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@VectorLock 11 days

Replying to @EGreg 🎙

"stable coin" is the "clean coal" of the crypto world.

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@marban 12 days

Replying to @EGreg 🎙

You know that shit has hit the fan when Reddit puts up the suicide prevention hotline in the sidebar.

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@Traster 12 days

Replying to @EGreg 🎙

The thing that I think some people miss about Tether is that it's not about whether it is backed enough it's either fully backed or it isn't. If it's not, it's not a question of whether it's back enough to weather this storm, it's about whether the people running it think they can weather this storm. If they think they can keep it running they'll sell whatever backing they have and keep the peg. But if they even think there's a decent chance they can't permanently sustain the peg then the best thing for them to do is take the backing and run, not sink it into a stable-coin they now know isn't going to work. That's going to happen way before they run out of money.

Let's say for example, Tether is 20% backed and there's $100Bn of coins so the backing is $20Bn, and people start flooding out of it. Let's say $10Bn floods out. So the guys running it have handed out $10Bn. They now have $10Bn left, and money is still flooding out. Do they really continue to hand over the cash or do they say "Well, the whole thing is about to explode anyway, I'd rather keep the $10Bn cash I've got left". At which point the holders of the coin have to play "Find these fuckers and sue them" which will be difficult since they've got $10Bn to fight/flee/hide.

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@EGreg 12 days

Replying to @EGreg 🎙

OP here. Note to everyone visiting our forum via the link… you are free to make an account and comment there, if you wish. The forum is about “Web4” — moving beyond Web3 ponzi schemes with an emphasis on social impact and utility of crypto.

I have since added a comment there, emphasizing the broader danger for crypto:

If Tether drops this could undermine the thesis that Bitcoin and other similar cryptos are good stores of value, because currently their value comes 1% from their utility and 99% from the collective belief (HODL etc.) which is circular and self-reinforcing, similar to various religions etc.

The “full faith and credit of the United States” or the exchangeability of banknotes for gold isn’t the main factor that has been backing the money we use. Real-world currencies that enjoy mainstream adoption in a given area are actually backed by goods and services they can be exchanged for readily in a certain area. Not so for cryptos (excluding services of remote workers such as software developers, which does represent a serious economy).

Here is what we would need to do in order to move the crypto space towards web4 and finally gain mainstream adoption of crypto in the real world:

https://intercoin.org/proposal.pdf

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@vishnugupta 12 days

Replying to @EGreg 🎙

Tether just burnt $600M worth of USDT, which I think means their reserves have dwindled by $600M. Am I reading it right?

https://twitter.com/whale_alert/status/1524675158836973570

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@qgin 11 days

Replying to @EGreg 🎙

I hear so much about why fiat is bad because of money printing.

So it’s wild to me that so much of Bitcoin is basically propped up by Tether printing.

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@tgsovlerkhgsel 11 days

Replying to @EGreg 🎙

Currently, Tether is back at 0.997.

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@xur17 11 days

Replying to @EGreg 🎙

This title does not seem to match the website that was linked to. It's certainly generating interesting conversation, but I'm a bit confused.

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@alexb_ 12 days

Replying to @EGreg 🎙

The entire concept of a "stablecoin" reminds me a lot of something from SIGBOVIK 2014. Keep in mind, this was written in 2014, before any stablecoins actually existed, and that SIGBOVIK is supposed to be a joke conference where people present extremely silly ideas as if they were real breakthroughs.

> DollarCoin: We propose skipping the middleman and providing direct proof-of-dollar with a blockchain that consists of videos of burning US $1 notes. Each video will be unique as the hash of every block header is required to be written on the dollar bill to be burnt; the block header includes the previous block’s hash, which means that each block is forced to build on every previous block, forming a valid blockchain

http://sigbovik.org/2014/proceedings.pdf

The fact is, people have convinced themselves that this is somehow a good idea. And then half the time, the person behind it doesn't actually burn any money and just arbitrarily mints coins. It's absolute lunacy.

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@notananthem 11 days

Replying to @EGreg 🎙

Nothing is FDIC insured. All your Coinbase assets can vanish and you'll be at the back of the line. Crypto is all speculative especially if you don't hold the keys.

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@gws 11 days

Replying to @EGreg 🎙

Come on guys, do some research, Tether now publishes audited reserve reports as part of the settlement with the US Department of Justice. ~70% of tether in circulation are backed by Treasury Bills and cash deposits, so immediately redeemable. The other ~30% in short term commercial paper can pose a bit of risk but unless they did something really stupid (and they are all but stupid) nothing to put the backing at risk. Tether is here to stay and if you feel giddy at the idea of it going down ask yourself why you are rooting for someone to fail...

https://tether.to/en/transparency/#reports

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@TylerE 12 days

Replying to @EGreg 🎙

Going to be a hell of a ride down.

Wouldn’t surprise Me to wake up to sub $20k BTC

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@skizm 11 days

Replying to @EGreg 🎙

USDT actually has a cash out mechanism directly with Tether (the company), right? If it is trading at 0.9935 (coinmarketcap showing this now), what's stopping people from buying 1 million USDT and selling back to the company to make a $6500 profit? Is moving it around very slow? Is the cash out mechanism limited to X per day or something?

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@norswap 12 days

Replying to @EGreg 🎙

The speculation in this thread is silly.

While Tether is certainly opaque (you could say shady), it's incredibly doubtful that it's unbacked to a significant extent. Even if it's only backed at 50% (which would be really shocking to me), it would take 39B$ to flow through the system to actually cause a depeg. That's very unlikely, and just the logistics of it means it would leave a lot of time to Tether to clear the air.

Consider that being "nakedly" unbacked (no underlying assets) in any meaningful capacity would qualify Tether's leadership for a quick trip to prison — as they've repeatedly said they were fully backed.

The real risk is them sitting on "commercial paper" (short term debt) that is now worthless or significantly discounted. I still doubt they would have lost more than 50% of reserves this way.

I think it's also interesting that SBF (FTX's founder) is fairly confident in Tether (of UST he said months ago "we know how this ends"). He seems better informed than most, and it seems unlikely to me he'd stake his company (which has extensive dealing with Tether) on a system that cannot be sustained.

I have no chip in this fight, and honestly, I do agree Tether is riskier than alternative, which is why I've never even held it. But UST and Tether are vastly different beasts in term of risk profiles.

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@bendtheblock 11 days

Replying to @EGreg 🎙

Young suicidal people in the Defi, LUNA and UST Reddit forums yesterday was hard to watch. This will only get worse. Regulation needed

https://webtwoboomer.com/real-people-are-getting-hurt-by-fak...

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@naveen99 9 days

Replying to @EGreg 🎙

Even if tether bought only treasuries, if people then bought bitcoin and then sold those bitcoin to buy treasuries, and then treasuries went down in price due to rising interest rates, tether will become under collateralized…

I mean you can’t just lever up 2x on treasuries risk free… a 10x leveraged position on 30 year treasuries would have blown out an account within a few months…

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@robertlagrant 12 days

Replying to @EGreg 🎙

Coffeezilla has been doing good work uncovering the mess that is Tether: https://www.youtube.com/watch?v=-whuXHSL1Pg&t=0s.

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@emehex 12 days

Replying to @EGreg 🎙

You can keep track of all of the various "stable"coins here: https://coinmarketcap.com/view/stablecoin/

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