Update: I get it thanks, so 1 USDT == 1 USD, but the USDT token in itself could be bought/sold at any price. I mean that's pretty obvious but I never thought of USDT as a separate instrument, I thought it was a literal "map of USD into the crypto world" (which it is, kind of, but not really, dang).
So, USDT is pretty much a future backed by USD, right?
You can sell it at a discount but why if you can get $1 for it. That makes no sense.
For tether to depeg something else must be going on
There is a huge amount of friction. It's not clear whether they run market-maker operations to pick up the spread between Tether and $1. As always, the question is what actual assets Tether has to meet its claims.
Of course they do.
On Bitfinex the peg has held strong because Bitfinex have a close relationship with Tether and enabled customers to convert USD/USDt freely (for now)
Other exchanges are experiencing either a temporarily blip (will eventually get arbitraged away) or it's the beginning of Tether being insolvent. Time will tell
This doesn't make any sense. Either you can sell it for $1 or you can't. If you can then it's free money to buy tether from people selling below $1 and selling it back to tether for $1.
I would describe the relationship between tether and bf as more than "close" they have the same owner.
assumption: bitfinex has "dollars" to backup every USDT.
If bitfinex will buy a USDT for a $1 if it drops below $1 to maintain the peg, they can do this because they have "dollars" backing each share.
however, they would also have to destroy that USDT on purchase (as they just spend the $1 backing it). They could print more USDT (/ sell that back) for $1 and they would be whole again, but if there is downwards pressure on USDT, one should expect to see the market cap for tether to drop while bitfinex is buying/destroying currently existing USDT.
If one doesn't see this drop, wouldn't that be indicative of a problem?
Though the minimum redeemable amount is $100k https://tether.to/en/fees
Why they are depegging is people are selling for under a dollar on coinbase (perhaps in panic); and Alameda Research (re: FTX exchange) who normally makes a ton of money doing the arbitrage between dollars and tether is having liquidity problems, so not doing it currrently.
The fact that people are willing to trade their USDT coins for less than 1 USD means that they do not believe those "real-world assets" exist in sufficient quantity. In other words, they are afraid that Bitfinex (USDT issuer) is scamming them and prefer to convert to American dollar, even at slight loss.
Asset. Not assets.
There is only one asset that an operation so big and trusted by so many should hold and that is U.S. Treasuries.
If you feel frisky you could do G-8 govt. bonds but that's about it really. And you are taking a chance on the forex exchange.
FTX just imploded because they didn't realize this simple fact. If you are a custodian and you are not advertising yourself as an active asset manager you should stick to US Treasuries and even that could be considered a breach because you should keep USD in a bank.
Keep USD in a bank and you have nothing to fear.
Tether themselves seem to be based in Taiwan: https://assets.ctfassets.net/vyse88cgwfbl/RPHIloRD3eE4J5QYNR...
Taiwan's extradition situation is .. informal. Because Taiwan does not officially exist. But there have been extraditions from Taiwan to the US.
They fully knew this. There is no business in keeping USD in USD (or US bonds for that matter.)
1 real billion > 20 make believe
You can officially redeem USDT 1:1 for USD. If you believe that it's fully backed and that the company honors all redemptions, you would buy a lot of USDT below $1 now, redeem it, and make a good profit via arbitrage. These buys will drive the price up again so that it goes back to $1.
Thus, the price reflects the trust in USDT backing.
Just a lot of misdirection, bs, and confirmed cases of people not being able to actually do it despite promises.
> “I’ve been minting/redeeming USDT on an institutional scale for over 3 years with multiple desks!” – said Ryan Salame, Head of OTC at Alameda Research, before adding
https://www.trustnodes.com/2021/01/05/alameda-research-revea...
Got it.
Do you have any others?
> It's sort of funny hearing people claim that you can't create/redeem USDT for $.
> Like, I don't know what to tell you, you can, and we do.
That is the same entity controlled by the same dude above. The one that is imploding due to a liquidity crisis. FTX.
Which is at least partially imploding due to…. Not being able to get customer funds out in the form of cash?
So again, do you have an example of an actual individual able to get actual cash out?
Preferably also not someone neck deep in the Tether mess, with huge incentives to make stuff up, and not actively in the middle of going bankrupt?
Edit: even better, it looks like FTX committed blatant fraud. So yeah. I’m taking anything they have said as likely the opposite of true.
From the trustnodes article, there's a link to: https://etherscan.io/address/0x1E65141A6ea081F382B737141137f...
There, we see the Alameda and FTX transactions, which we know the Alameda transactions are for redemption and we know FTX (via Sam Bankman-Fried) says redemptions work. We also see that Binance has sent the same sort of transaction (e.g. From Binance 4 to Bitfinex 3).
You started with: "Can you give an example Tether actually doing redemptions?"
I sent the trustnodes article.
You then criticized it based on the ongoing Alameda/FTX fiasco. Sure, that's all a mess and any statements like "FTX is fine" were nonsense and there's zero reason to trust them with your money. But, does that mean that they lied about their experience redeeming Tethers?
It seems that for some folks the only way they'll ever believe things like, "Tether does redeem for USD" is by actually going through the process. For Tether, that's a process requiring $100,000 to figure out. And if it works, why would you bother posting about it on the internet when Tether itself continually reminds people that redemptions are being processed?
They have the exact same issue.
Binance is literally completely untrustworthy here.
Literally the only people who say they can do anything regarding redemptions with Tether appear to be insiders with a vested interest (in the billions to tens of billions of dollars) in it looking like you can do Tether redemptions.
Which is my whole point. And you keep reinforcing it while not realizing you’re doing so.
Tether got prosecuted by the US Treasury department because of flat out lies about currency and assets backing it. Have you read the indictment? It’s pretty damning, and has a lot of concrete information in it regarding what little actual banking infrastructure they had, which was essentially none (or at least little to no LEGAl infra).
Tether has a long history of flat out lying on exactly this topic.
My exact point is, there is zero evidence from anyone who isn’t deeply in bed with Tether.
But this is people buying and selling their USDT, in a market, they can try to sell for a any price and if there is a lot of people trying to sell and not so much trying to buy, it naturally goes down in price
This variation though, while large, isn't that uncommon AFAIK