Bitcoin itself is powered by the miners, but the fiat value of bitcoin is backed by USDT. If there was doubt about the peg you’d see a run.
I understand this as price manipulation by Tether, not as evidence that BTC is backed by it.
> currently the bitcoin market accepts USDT as equal to USD, despite evidence USDT is not backed
Yeah, it's unfortunate. I don't understand why people won't use BUSD instead.
> If there was doubt about the peg you’d see a run.
Probably. In my opinion, people should exchange USDT for BUSD while it still has value. That way everyone will continue trading normally when all the controversy catches up to Tether.
This is sound advice for the individual but it doesn’t work for the market as a whole.
I’m arguing Tether is a sham. When too many people try to get out of a sham, it collapses.
Currently, 2/3rd of people who try to sell their BTC find USDT buyers. If Tether is revealed as a fraud suddenly the sell side will outweigh the buy side.
Where are all the people holding all the USDT? It seems nobody is complaining. I'm bearish on BTC price right now but can't help thinking someone should have already cracked the USDT wide open. Eventually someone (few brokers) will be left holding USDT with no buyers. I can't believe brokers are allowing people to cash out w/o guarantee the stable coins they redeem can are not cashable somewhere.
Part of the answer I think is that you can lock up Tether at 12+% interest. So the system encourages withdrawing tethers from the system, at unsustainable savings rates.
https://bitcompare.net/coins/tether/savings-interest-rates
The other part is that it is not easy to directly trade USDT for USD. Kraken is the only place you can do so directly, it is the only place the peg is directly tested. Apart from that to get USD you need to trade to something else, like BTC or ETH, and then sell that for dollars.
The only people likely to have held USDT are also likely to be long crypto, so not surprising they wouldn’t cash out.
The better question is who are selling their BTC/ETH for Tether, and what do they do with the money after? Surely the locked in savings are part of the answer: interest rates on stablecoins are much higher than on BTC/ETH. But I don’t think it is the whole answer.
Presumably enough people don’t question the peg that it can stay afloat for now.
I'm not convinced. Were these products around a few years ago when people were sounding the alarm bells about tether?
What do you mean? I trade USDC and USDT from and to Fiat using Binance, and it's a breeze. I get the funds directly on my bank account in 5 minutes or so, and I imagine the same happens on Kraken, coinbase pro, gemini/blockfi.
Source? Because this is very far from any data I have.
You can see here Tether’s 24 hour volume actually surpasses bitcoin. It’s used in ETH trading and elsewhere which is why its volume is larger.
https://www.coindesk.com/price/tether
https://www.coindesk.com/price/bitcoin
For the 70% figure I’d have to dig a bit to fully check current volume. It’s been widely repeated in articles, they use data which check flows through exchanges.
Binance may have a bit less USDT than before?
https://coinlib.io/exchange/binance
Separately, Binance is a lot of bot-trading, and, outside of BN, USDT-heavy exchanges have questionable volume figures (wash trading and fake trades).
USDT usage has indeed gone down in favor of other stable coins, and while Binance is huge among exchanges, it's just one fraction of the BTC economy.
If we go by what your sources allude to - trades on centralized exchanges - it'd be a matter of summing up the trading volume for each par involving either asset on any side.
Let's first look at Binance for the past 24h. I get:
BTC: 1.9 BUSD
USDT: 3.8 BUSD
If we look at more exchanges (here 31 in total):
BTC: 7.6 BUSD
USDT: 9.6 BUSD
OTC transactions (even those run by exchanges, like Coinbase) are not included here, for example. Neither are payments, on-chain transactions, or L2. Some will argue (I don't) that derivatives markets like BitMEX (margined/settled in BTC) and CME (margined/settled in USD) are reasonable to include as well, which are huge in BTC and again negligible in USDT.
As for sources - any serious exchange provide APIs for trades, and there are vendors that aggregate them. Coindesk and Coinlib acquire APIs and data from such vendors, who base them on the self-reporting of exchanges.
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I don't think there's any published recent study that looks at this properly. It takes effort or money to get the proper data, knowledge to model it, and time to compile it. Most of the people I know with the means are having their hands full with other stuff right now ;)