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Comment by Slartie | Hacker News Reader

There is an upside of holding USDT (although not a monetary one): it serves as a "stable" store of value on non-USD-banked exchanges when trading other cryptos.

Especially right now, with the market going down rapidly, a lot of people probably sold coins on the way down with the intention of buying back into the market at a later point in time. A substantial number of these traders temporarily hold their value in USDT in the meantime, because that's easy to transfer between crypto exchanges.

Volume on USDT/USD is going down right now btw, while it stabilizes at around 0.986. I wouldn't bet on this drop having been the last one in the current market disturbance, but I'd bet on USDT not collapsing the same way UST did, at least not within the coming days.

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That’s instant 0.024 profit…

Easily crash by loading 10,000,000 arbitrage for free $200k grab sums.

This is a domino effect.

There is nothing "instant" in the process of buying millions of USDT, then sending them over to Tether for redemption against USD. The redemption process of such sums is a manual process which takes at least some days, even if it works out in the end (assuming Tether is liquid).

It’s instant given it’s guaranteed. If that doesn’t follow then it topples under its own promise.

It’s not guaranteed at all. Tether made it abundantly clear they give no guarantees they will redeem your USDT. It also isn’t instant.

This is public knowledge and has been well documented for years. Tether is likely to be the least trustworthy actor in the entire industry.

Sorry by instant I meant expectation of receivables. I also am arguing that is a bad assumption.

Sadly, from personal experience I can tell you that the expectation of receivables cannot be used to buy groceries or pay rent.

It can if you’re already in a flow, but yeah it can stop. Back channel deals, etc.

It is guaranteed - by Tether. But the effectiveness of this guarantee is what's questioned, and the only way to fully validate this guarantee is to wait until the USD have left any accounts controlled by Tether and arrived in your bank account. You are inside the danger zone and outside of the profit zone until this process has completed. And this process is not instant at all.

[edit] Indeed, as dgellow commented, Tether actually does not strictly guarantee the redemption of USDT to USD. They use sleazy legalese in their Terms of Service to reserve the right to "delay" a redemption in case of illiquidity, without specifying how long that delay may last, so effectively they can simply "delay" your redemption for an infinite time.

Any large purchase will likely push the price up

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