956,030,724 USDT (956,030,724 USD) transferred from Bitfinex to Tether Treasury | Hacker News Reader

956,030,724 USDT (956,030,724 USD) transferred from Bitfinex to Tether Treasury

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50 pointsdoener24 comments

Tether is the biggest scam in history at $84B Achieved this dubious honour last year when it overtook Madoff’s $64B They have printed $80B in less than 3 years. I wrote a blog post explaining this and much more last month. What is Money? https://www.onedb.online/blog

I guess people are withdrawing USDT to USD on bitfinex, so bitfinex needs to redeem USDT? Is there another obvious explanation I’m missing?

I don’t know if these figures are typical, but if not, they could, in turn, mean there’s unusually high demand to turn USDT into “real”(er) dollars, which would indicate collapsing faith in Tether.

FWIW, on Thursday I saw Tether (USDT) following the same pattern as TerraUSD: a small but persistent discount agains the dollar. I then sold/closed all my Tether longs. Not investment advice, DYOR.

You missed a more significant movement -- between Wednesday and Thursday, Tether exchange rates were unstable for a period of 24-36 hours, and briefly dropped to near $0.95 USD/USDT. Exchange rates have mostly recovered since then, but remain nontrivially lower than they were a week ago.

I saw it, I’m just think there’s a lot more evidential value in a persistent discount than very brief crashes that recover. The discount had been going on for several days by that point (not having hit parity in that time).

> closed all my Tether longs

I've been wondering, what's the downside with Tether shorts? If it remains stable, then the shorts don't move in value. USDT is unlikely to moon above $1.00. If it collapses then the shorts print money. All you pay is the fees associated with creating and maintaining the positions. Seems like it's all upside.

I'm assuming there's some counterparty risk with exchanges blocking trading of synthetic derivatives if the underlying asset is imploding?

It’s mostly just counterparty risk but in a different way than what you described: if usdt implodes, then the exchanges goes down with it and you can’t withdraw your usd. You have to construct your position in such a way that your fiat money is outside of the crypto exchange.

Six months later and people still neglect the existence of decentralized exchanges![1]

On Compound, they have a frustratingly big collateral buffer, and have built up reserves over time from past liquidations, so it’s really hard not to get your collateral back.

(Caveat: To be sure, there could be a latent smartcontract vulnerability here.)

As in the thread, it is much harder to get a flash rally on decentralized exchanges, since you’d have to keep it up for enough blocks to trigger the Oracle.

If I were going to (further) short Tether, I would convert a bunch of USD to USDC and deposit it on Compound, then borrow ~65% of it back as Tether, which I would immediately convert to USDC then USD to invest more safely. You could also put some of than back into Compound to increase your USDC collateral buffer.

[1] https://news.ycombinator.com/item?id=28792712

That makes no sense. Exchange is a zero sum game. Anyone selling USDT on Bitfinex (the exchange) for USD is just swapping assets with someone else doing the opposite. The exchange itself wouldn't accumulate Tether as a result of this trade action... unless they're playing market maker on their own exchange?

It only makes sense if Tether (the organisation) is itself buying back USDT on Bitfinex to support the price (in which case the Tether would be withdrawing back to their Treasury)

Of course I realise that Bitfinex and Tether are entwined, and it proves nothing about their asset store.

I believe bitfinex treats USDT as USD meaning if you deposit dollars via a bank account you receive USDT and vice versa

Why do people still treat these numbers as equal to fiat, government backed currencies.

You ever been to one of those food plaza places where you have to top up a prepaid card in order to pay for the restaurants? Or bought chips at a casino? Or bought Chuckie Cheese tokens as a child to exchange back into "real" money when you're done playing? Stablecoins are like that for the DeFi world. Places like Gemini/Coinbase are the legal onramp. You exchange official money for crypto there, trade it for chuckie cheese tokens, move it out to some other "web 3.0" property operated from god-knows where, then do DeFi stuff there and when you're done you do the above in reverse.

You can't change Chuck-E-Cheese tokens back into real money. The entire point is that they get all of your real money at the time when you buy the tokens, making it irrelevant whether you use them afterward at all.

> You can't change Chuck-E-Cheese tokens back into real money.

Same thing with Tether. Retail "investors" can't change Tether back into USD unless they do so on amounts > $100,000.

It's the same scheme.

> The entire point is that they get all of your real money at the time when you buy the tokens, making it irrelevant whether you use them afterward at all.

Yup, Tether in a nutshell.

As a child I absolutely loved chuckie cheese tokens! The entire crypto bubble makes so much sense now!

Even if you could convert Chuck-E-Cheese tokens back to real cash, who would thing that's a great place to hold your life savings as opposed to a bank?

Legal should be in air quotes.

At best, these coins are the prize tickets from a game played with legal tender and those prizes are certainly valuable but because tickets can be exchanged for prizes you convince a bunch of ignorant people to just give you money for tickets.

Your version ignores the nfts and other garbage "built" on the block chain

Imagine if everyone just issued stablecoins against their assets such as their house, future income etc. and turned around and bought treasuries. So every usd in m1, m2 etc. gets swapped out for 300 million different stable coins all pegged to the usd. Now the fed raises interest rates. This does not end well.

What does this actually imply?

This link is even more interesting: https://twitter.com/whale_alert/

That's the same link.

Sometimes the mods fix the redirect, so perhaps it was different initially. But it's strange that they didn't post a comment about the change.

Could have also been a simple copy/paste fail. They do normally post when they edit user submissions.

Hopefully they didn’t buy too many 30 year treasuries to back those tethers. I mean bonds have lost some value as interest rates have risen.

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