Has Tether Turned the Corner on Reserve Doubters?

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1 point·ekpyrotic··5 comments

More of the same --- piled higher and deeper.

You still can't redeem USDT for USD unless you are a "professional investor" with at least 100,000 USDT. Sorry little guys, you are just screwed.

This alone should be a huge red flag --- but then again, the entire unregulated crypto marketplace is just one huge red flag.

I agree that there are good reasons to be skeptical of Tether, but this isn't one of them, as you could say the same about most ETFs: you can only redeem ETF shares for the basket of securities in large quantities. Quite reasonably, no one believes this "screws the little guy" or puts the ETF shares at risk of a depeg.

you can only redeem ETF shares for the basket of securities in large quantities

Not the same.

You put your fiat into an ETF, you can take your fiat out --- at any time. No artificial, BS excuse that the amount isn't big enough.

This is possible because ETFs are actually regulated by the SEC and backed as advertised 1:1 by the underlying liquid securities --- not phoney IOU paper.

No, ETF liquidity works the same as USDT. If you hold USDT you can easily sell it for USDC and redeem that to cash through Coinbase. USDT has liquidity against the dollar and large market makers arbitrage that with their ability to mint and redeem Tether - exactly the same way an ETF works. When you sell an ETF your counterparty is some market maker who is probably making a few bps between the price you sell it for and the NAV of those shares.

USDT is clearly more liquid than an ETF, as well- while stock markets are open less than 20% of the time, crypto trades 24/7. 3pool has over $500M of USDT liquidity at a minuscule 1bps fee. So for all intents and purposes it’s worth a dollar and more easily redeemable than an ETF.

No.

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