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Comment by adrianchifor | Hacker News Reader

You know who already made tens of millions in profits and will continue to because of stories like this? Market makers that redeem billions of USDT for cash with Tether/Bitfinex every time it goes under $0.99. Borrow USDT on leverage, cash out at $1 to US bank, mint USDC with Circle, swap to USDT, repay USDT loan and bank the difference, rinse and repeat until it's back to $1.

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> Market makers that redeem billions of USDT for cash with Tether/Bitfinex

Have people actually seen the receipts for this? I'm skeptical that this actually occurs.

Hey, a highly reputable trader Sam Bankman Fried claims to habe done exactly that. His reputation is second to none.

It's not a risk free proposition, it's probably a losing proposition in the long term.

Every time it dips under $0.99, there's a chance it goes straight to $0 and cannot be cashed out anywhere.

I think that's likelihood is connected to the government resolve to rein in crypto shadiness, which given recent events seems like it's only starting to pick up.

This will absolutely happen some day

If the feds rate prediction are true, probably within the year.

why? tether can survive a 4.25% overnight rate and not 50%?

>there's a chance it goes straight to $0

Since Tether is fully backed the chance is really small.

They merely claim it is fully backed.

No, they also have third party attestations that it is fully backed.

Apparently those attestations are relatively recent in their history, but also not very convincing:

https://www.coindesk.com/markets/2021/03/30/tether-takes-ste...

"as noted later in the article the composition of Tether’s assets is not spelled out in the attestation"

Meaning they may be backed by loans or fraud coins or anything.

Tether is not fully backed.

There is no proof of this. Despite many people complaining Tether continues to pay out billions dollars to people redeeming tethers.

what does that have to do with anything?

being able to pay out some portion of "deposits" is obviously not evidence of being "fully backed".

It is evidence that Tether isn't going to instantly crumple like what some Tether haters believe.

If you want evidence of being fully backed they have attestations on their transparency page that breaks down their assets.

nobody is redeeming tethers with bitfinex, they don't even have proper banking anywhere and their accounts are constantly shutdown by various entities.

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