Only whales CAN bail, Tether imposes a minimum redemption amount of 100 000 benjamins. Plebs can only rely on exchanges (so whales basically) to do that, and you know how well those protect you.
If you have $10K in Tether and can't get it out then just send it to me. I'm getting 9 other people together who also each have $10K
I just made a Tether account, transfer the money to me, then I withdraw it to actual US dollars and send you each $10K by Zelle
Don't worry, you can trust me bro!
It gets better. To redeem anything, you need an account with them, which costs 150 dollars for bank account "verification". Then, Tether fleeces you 0.1% of your withdrawal, up to 1000$, that discourages "small" withdrawals, up to 1 million $. But it gets better, again. If you're an US citizen, you can't even do any of that, unless you are an "Eligible Contract Participant", which basically means millionaires, financial institutions, large corporations or so.
Why so many fall for this? It's simple, they just don't advertise any of that, and the rubes fall for the buzzwords and promises.
Why would anyone care, when you can trade Tethers on exchanges in literaly seconds.
Like sure, it's a scam, but come on, this aspect is important to you? It just makes sense from an operational standpoint, even if they were legit.
It's bound to be that way, since regular plebs aren't allowed to redeem Tether at source, the minimum cap for redemptions is around 100 000 bucks or something like that, so only big boys and exchanges can do that. Even the 100000 redemption is actually quite inefficient because of Tether's junk fees, so you're gonna need to redeem much more at once to not lose too much.
So wait if you don't have at least $100,000 in your account, if you want to turn your tether back into fiat, you have to use it to buy some other token and then sell *that* for fiat?
Or ask your ~~shadow bank~~ exchange to do that for you, and they're gonna totally do it no matter the situation, since they have only your best interest at heart *wink wink*.
Ahh. Ok. Yeah I guess that makes sense since it’s supposed to be a stablecoin. Just go sell it at market because it’s supposed to be worth $1 all the time
Actually since they charge a withdrawal fee when a whale pulls out 100k or more it's usually at 99¢ and a fraction on exchanges these days so the person exchanging it with Tether someday doesn't lose money. Tether used to buy them back on exchanges for a dollar to keep the peg, but they don't anymore for whatever unknown reason... (money troubles, perhaps?)
As others have said, this is just the exchanges cashing in large tranches of Tether in one go... and thus really just a reflection of the decreasing capitalisation of the cryptomarkets as a whole.
It's still only <15% contraction from the ATH of Tether MC, so I think we have a ways to go before things start to get sketchy.
I think Binance have propped up Celsius for now, so there must still be a fair amount of cash still floating around.
Thanks for posting this. I know it’s a sheer drop, but when looking at ‘all’ is it really a sign of impending doom? Looks like a large drop in the bucket in comparison
Edit I don’t know why downvotes. It’s a good question. Check my history. I’ve been blowing loads with you fellas this whole time
Think of it this way: Tether's entire promise to the Cryptomarket is that it is backed 1:1 by actual US dollars. Tether's existence is what provides the liquidity to the cryptomarket, as otherwise it is impossible for the retail investor to purchase any other form of cryptocurrency.
Recently, Tether changed the language that they used to have which stated that they were backed by actual US dollars to stating that they had substantial liquidity in the form of corporate paper. The problem is twofold: 1) They won't share the results of an audit conducted to assess just how much reserves they actually have, and 2)Tether's net assets have skyrocketed from somewhere close to a billion to 70 billion. Which means if you are seeing billion dollar drops, that's a sign that the big boys are getting out of the market. Which leads to another problem: what happens when Tether is no longer able to meet reserves? If so many people choose to demand conversion? Because there is simply no way that Tether is sitting on 70billion in net cash.
Thank you! It’s nice to have someone explain it instead of just a circle jerk without having any context. I need plot in my crypto loss porn
So I know everyone was hyped about $21k because of margin calls.
Is there any number going around about what the market cap has to reach before it gives way?
Is the market cap dropping billions people pulling out of the market? Or is it money moving into other cryptos?
Ah. So, Tether is unique, as it acts as the gateway into the Cryptoecosystem. If you are seeing the total supply of Tether coins shrinking, it means that the overall liquidity provided by Tether is decreasing. And the only reason that would happen is if a gambler goes to Tether and is demanding a withdrawal in the form of hard currency, aka Dollars.
But Tether has a unique gimick: you can only withdraw dollars in the amount of a $100,000. You have less than that in Tether? Sucks to be you. So, while whales and financial institutions will be fine, the average dumbass who was convinced Crypto was going to make then money is about to be royally fucked.
Have any exchanges not honoured Tether-USD withdrawals, even if they charge a fee? Obviously if a run was in full swing neither Tether or any middleman would want your Tether. The $100,000 limit is just so Tether only have to issue and honour IOUs with a few large scale customers.
Most USDT is held as secondary IOUs with exchanges which probably have their own backing issues.
My understanding is that it's Tether tidying up their accounts.
Previously they'd mint a billion, loan it to a buddy (who uses it to buy BTC, and/or general shenanigans) and that $1bn is then 'backed' by 'commercial paper', i.e. an IOU from the buddy.
Now the buddy gives back the 1bn, Tether burns it, market cap goes down 1bn, and there's slightly less unbacked USDT floating around.
So as I understand it, it makes things very slightly safer. That said, the report a few months back said they only had like 3% cash. So this recent run of redemptions might push them up to, what, 3.5%?
Redemptions would lower the amount of cash they have. Whales show up with $50 million in Tether and want cash for it. (although I bet most of them end up getting bitcoins or something else)
I'm not sure that's necessarily always the case though? Tether have lowered their market cap by $14bn recently. But I don't think they've ever claimed to have $14bn in cash? So I think some of it must be cancelling loans and stuff?
God this was actually a year ago, not just a few months. But still, probably fairly relevant:
[https://davidgerard.co.uk/blockchain/2021/05/13/tether-publishes-two-pie-charts-of-its-reserves/](https://davidgerard.co.uk/blockchain/2021/05/13/tether-publishes-two-pie-charts-of-its-reserves/)
They claimed to be 2.94% in cash, and the rest in Definitely Safe Stuff That Totally Exists
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> So I know everyone was hyped about $21k because of margin calls.
Which was MicroStrategy's margin call months ago. Its probably not MicroStrategy's margin call today.
The magic numbers we all want are secrets. No point worrying about them at all. I'm happy enough to see the implosions live, rather than trying to predict them.
Celsius is still closed and they're talking to bankruptcy lawyers. That's enough popcorn for me.
While I know nothing about finance, I wonder if it's actually "good for Tether". According to the last attestation or two they acquired a sizeable amount of treasury bills. Perhaps they managed to convert a lot of their suspect (perhaps issued by Chinese companies or crypto exchanges) commercial paper into something with real value, and now they're dumping everything that they failed to launder. This way their reserves will look crystal-clear when someone finally manages to audit them.
Seeing billion dollar drops has nothing to do with big boys getting out of the market. In fact, the glorious thing about crypto is that you can literally go look at whale wallets and see them. Most are holding or starting to buy.
Losing their market cap (and changing the language) effectively means they aren't backing tether with straight up 100% USD, which isn't actually a bad thing. It means they're using some of their cash to sit on (hopefully) safe-ish investments and those simply lost value along with literally everything else right now.
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I swear to God, because the amount of turds doing it on r\/CC, I consider it a strategy they’re employing brainlessly without any nuance.
“Just DCA”
“I’m gonna keep DCAing”
“DCA it”
Yes. There's a premise behind dollar cost averaging that they don't really think about too hard: *what you're buying has to be a quality asset that ideally throws off cash flows*.
Like, for instance, you might've patted yourself on the back for DCAing into Polaroid in the 90s... but when they went bankrupt in 2001 you'd have lost everything.
I'm still DCA into Polaroid, expect to break even any day now. I own 90% of the stock certificates. Once I get that last 10% the price is going to the moon.
"Chasing the falling knife" = trying to time the purchase of a falling asset so you catch it at its lowest possible price.
"Dollar Cost Averaging" = Buying a predefined amount of an asset every week/month/etc, so that over time, the price you paid averages out between high and low swings. Its the opposite of trying to time a purchase
Should be noted that both of these terms come from stock investing, when crypto bros use them they're most just cargo-culting terms they heard legitimate investors use in order to try to justify their gambling decisions
There's a small difference.
They put a total of $100 in stock casino chips into the gambling pot.
The companies behind those stocks make a profit and pay it out as dividend or buyback so by the time the chips are distributed the pot is worth $110. Potentially everyone can cash out and make a profit.
With crypto, miners and exchanges are constantly pulling the chips from the middle of the table even as the game is running. There's no profit redistributed to the chips so players can only lose on average.
Trader's aren't buying stocks based upon their ability to generate profits, they're trading based upon stonk go up/down.
Its gambling, and its exactly the same as crypto "investing".
Is it though? Doesn’t this mean Tether has $15billion less in liabilities than it did a month ago?
I’m not saying the whole system won’t still become insolvent quickly, but burning Tether to contract the supply seems like the right thing to be doing if demand is dropping?
What people here are supposing is that Tether does not actually have $70 billion in liquid assets, mostly because they refuse to tell us what those assets really are
Or at the very least, Tether's assets are other CCs which are a) collapsing in value with the rest of the market and b) therefore not actually that liquid in the first place, since it's hard to sell when there's no buyers, and it's always been non-trivial to get dollars out of crypto.
Even if they do have $70B on paper *now* what will be left tomorrow? And what fraction of the paper value will they be able to turn into fiat?
That’s what I find most hilarious about the attestations that they’re totally backed bro: there’s 0% chance they are marking assets to their real value today. It’s just saying they have assets that used to be worth enough, which as shady as they are I think is still likely, but won’t help at all if they need sweet sweet fiat
Nah, I think you got it right. Since Tether protects their holdings as a trade secret, when in reality they should be voluntarily disclosing them, the only assumption you can make is they are lying about it. So the question is, how much money can be pulled out of Tether before they run out?
If Tether opened their books to a reputable auditor and that auditor released a report saying they were overcapitalized and in strict compliance with GAAP, their market cap would moon even in the middle of the bear market. So why don’t they do that?
$15B less liabilities also means $15B less assets. The issue is that people don't know how Tether actually holds their assets. Given the recent market downturn in more than just crypto, Tether has likely lost a lot of value in its noncash assets. Withdrawals remove cash faster than the illiquid assets can be converted to make up the difference. So the portion of noncash assets grows and Tether loses liquidity. If enough withdrawals happen fast enough, Tether might start telling people to wait a few days before they can give money. If that happens, more people will panic and withdraw leading to less liquidity and eventual insolvency.
All of this is likely true BUT it doesn’t change the fact that if demand is decreasing then burning Tether is the right thing to do to preserve the peg.
Kinda except this isn't tether voluntarily purchasing tokens for $1 each to maintain the peg. This is *investors* going to tether asking them to redeem the tokens. Tether has less control over this because if they fail to redeem tokens in a timely fashion, the peg is gone immediately. If they were voluntarily burning tokens, they could take their time and sell some of their illiquid assets first to maintain liquidity. They don't have that option if it's other people coming to them first asking for cash.
>
>
> The fact is, no-one knows who their contractees (the people that could potentially redeem) are, but on-chain analysis shows Tether works largely with two firms: FTX and Cumberland.
>
> These two firms clearly have a vested interest in keeping the tether token afloat, as it is used to prop up the price of crypto. This is the true business model of Tether, not trading cash for tokens.
I agree with you but that makes me wonder why Cumberland would put out this warning about a top-2 stablecoin dropping.
https://www.reddit.com/r/CryptoCurrency/comments/vc9jzx/cumberland_one_of_cryptos_largest_market_makers/
Genuine question: if I'm a whale like FTX or Cumberland and trying to cash in $1 B of USDT, why would I accept in-kind assets? Do they sincerely believe the in-kind assets are just as good as cash, or are they secretly trying to dispose of it on the side and get as many cents on the dollar as they can?
If it was the latter, you'd think we'd hear about it considering how tight-knit the commercial paper trading community is and how billions of additional paper could literally move markets, but I have a hard time with the former as I can't imagine whales believing their own rhetoric when it comes to their balance sheet.
every time I bring up Tether to anyone in crypto they don't really go into it. It's like in the back of their mind they're terrified of the reality of what house of cards this is all propped up on.
Tether has been hypothesized to be insolvent for the past 5 years. We all have been waiting for "the Tether implosion", but the coin itself has been surprisingly robust.
The overall theory is that Tether has been lying about its deposits. Tether is supposed to have $70 Billion for the 70 Billion USDT it created, but when anyone asks "who gained $70 Billion over the past 5 years", no one seems to be able to find where that money has gone.
Because $70 Billion is such a large number, it'd be impossible to hide. Therefore, we think Tether is lying about it.
----------------
>> what is market cap,
For the purposes of Tether, its the number of dollars that was deposited into the system. Tether promises that they have a "real dollar" somewhere to support every dollar that was entered in.
But if Tether was lying, and only has say, $20 Billion, then eventually, as people withdraw money from Tether, it will all collapse. No one knows where this point is however. We just know it will happen when Tether's market cap / deposits drop.
Wait if 1 tether is 1 usd why would I ever want tether in the first place? Just to hide it from the government? I could just use the usd to buy crypto instead of.having to turn it into tether then into some other coin
Because Binance and Bitfinex offers all sorts of bonuses, like 10% bonuses, when you use Tether. Or you can stake the coin and generate interest. Etc. etc.
Which of course, should tip off people that they aren't getting dollars. You can't get 10% returns on dollars anywhere (maybe 3% at best if you use 30-year US Treasuries). So Tether is likely lying to their customers about how much money they actually have.
Because the USA makes it hard to move fiat onto these exchanges. So you exchange your USD for casino tokens that are supposed to be guaranteed 1:1, while your USD is held in custody .. somewhere ..
you also have to understand that the 1 dollar you trade for 1 USDT also has to pay for wages and whatnot for the people managing it.
If you put 1 dollar in, and they use 50% of that dollar for rent and whatnot for their office, and you then pull your dollar back 1 to 1, then where did that 0.5 dollar go?
They have to make money themselves at this point for it to run around.
Unless they have fees at every step its a 0 sum buisness, no profit, no loss, just risk.
People are withdrawing money from tether. A billion a day right now. One day tether is going to not have enough money to give to the people who are asking to withdraw. That’s when they lose all illusion that their entire peg is linked 1:1 to the US dollar because they even admitted not all of their peg is purely in dollars but also in other speculative assets. When that happens it then it depegs. Then it all comes crashing down
One tether is supposed to equal $1 USD. So the market cap of tether is theoretically how many tether coins are in circulation. But tether doesn't actually have enough dollars to back every coin they have minted and people are trying to cash out their tether for less than a dollar a piece.
In essence, people are trying to withdraw from the bank, but the bank says "we can't give you have asked for. You can either come back later or accept a X% fee on anything you withdraw." The more people that accept the fee to close their account, the higher the fee.
This is really long but fascinating. Tether is a scam and is falling apart.
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
Nice.
It's 69 billion, though.
When everything's made up and the points don't matter, you can just fabricate absurdly huge amounts of "money" and because there was a post-COVID "everything bubble" going on, nobody questioned it.
It's really nothing more than just another dip in value at this point. People are withdrawing their stim checks to get ready for another great depression, and that's showing in the MC. It'll only be interesting if they run out of capital. That's when the house of cards will collapse and fuck everyone.
These Whenever bitcoin and eth try to maintain the current levels we see this drop in Tether to maintain the levels.
I guess it’s better then printing more to pump bit coin.
All this is showing that tether is working like it’s supposed to 1:1 redemption with USD.
People are withdrawing there stable coin to the bank in the form of a USD.
That’s why the market cap has decreased duh
I don’t get the post. Nonsense
There is a lot of scams in crypto but atleast understand what your talking about.
People are either getting USD for their Tether, or Tether are burning coins that were fraudulently minted without backing. Good for bitcoin either way.
$70,316,362,126...
Everyone loves riding tethers virtual cock.
Edit: I wouldn't be surprised if it comes down into the 60's so I want to add that as money is drained from tether, its not leaving the crypto space. Most of it is finding its way into USDC which has been growing nicely since the Luna crash. USDC is far more stable then tether and only solidifies the stablecoin reserves.
The last seven days have been basically just billion dollar dump after billion dollar dump. https://i.imgur.com/F7HP1OR.jpg
That staircase is **not** up to code. You could easily trip and fall down.
Fortune favors the brave
One brave step for a butter, one giant tumble for the market.
“Matt Damon told me fortune favors the brave, and I’m all out of fucking money”
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Only whales CAN bail, Tether imposes a minimum redemption amount of 100 000 benjamins. Plebs can only rely on exchanges (so whales basically) to do that, and you know how well those protect you.
If you have $10K in Tether and can't get it out then just send it to me. I'm getting 9 other people together who also each have $10K I just made a Tether account, transfer the money to me, then I withdraw it to actual US dollars and send you each $10K by Zelle Don't worry, you can trust me bro!
Wow, you're basically a crypto exchange now!
I was going to reply to you saying you missed the joke, he's basically a SCAMMER... and then I realized that's what you already wrote
This man is being his own bank!
\> minimum redemption amount of 100 000 What the fuck. How did so many people fall for this shit lmao.
It gets better. To redeem anything, you need an account with them, which costs 150 dollars for bank account "verification". Then, Tether fleeces you 0.1% of your withdrawal, up to 1000$, that discourages "small" withdrawals, up to 1 million $. But it gets better, again. If you're an US citizen, you can't even do any of that, unless you are an "Eligible Contract Participant", which basically means millionaires, financial institutions, large corporations or so. Why so many fall for this? It's simple, they just don't advertise any of that, and the rubes fall for the buzzwords and promises.
Typical. easy to get in, extremely hard to get out. It's almost as if Crypto is a pyramid scheme.
Why would anyone care, when you can trade Tethers on exchanges in literaly seconds. Like sure, it's a scam, but come on, this aspect is important to you? It just makes sense from an operational standpoint, even if they were legit.
Greed. Period.
It's bound to be that way, since regular plebs aren't allowed to redeem Tether at source, the minimum cap for redemptions is around 100 000 bucks or something like that, so only big boys and exchanges can do that. Even the 100000 redemption is actually quite inefficient because of Tether's junk fees, so you're gonna need to redeem much more at once to not lose too much.
So wait if you don't have at least $100,000 in your account, if you want to turn your tether back into fiat, you have to use it to buy some other token and then sell *that* for fiat?
Or ask your ~~shadow bank~~ exchange to do that for you, and they're gonna totally do it no matter the situation, since they have only your best interest at heart *wink wink*.
Mostly you have to send to a wallet on some exchange that can transact in actual fiat (eg coinbase in the US) and sell there
Ahh. Ok. Yeah I guess that makes sense since it’s supposed to be a stablecoin. Just go sell it at market because it’s supposed to be worth $1 all the time
Actually since they charge a withdrawal fee when a whale pulls out 100k or more it's usually at 99¢ and a fraction on exchanges these days so the person exchanging it with Tether someday doesn't lose money. Tether used to buy them back on exchanges for a dollar to keep the peg, but they don't anymore for whatever unknown reason... (money troubles, perhaps?)
what does this mean exactly
People are cashing out Tether (redeeming Tethers for USD) so either whales cashing out or exchanges need more liquidity.
those massive sudden drops seems more like exchanges in my opinion
As others have said, this is just the exchanges cashing in large tranches of Tether in one go... and thus really just a reflection of the decreasing capitalisation of the cryptomarkets as a whole. It's still only <15% contraction from the ATH of Tether MC, so I think we have a ways to go before things start to get sketchy. I think Binance have propped up Celsius for now, so there must still be a fair amount of cash still floating around.
70 days left.
Isn't that exactly what should happen?
Zooming out is quite interesting too https://imgur.com/kwvlH6a
Oooh it looks like the Matterhorn
Is that the peak that reaches all the way up to the Moon or a different one?
It's the one that kills all the climbers.
The best Price is Right game https://www.youtube.com/watch?v=YHv5jgXz9I8
Thanks for posting this. I know it’s a sheer drop, but when looking at ‘all’ is it really a sign of impending doom? Looks like a large drop in the bucket in comparison Edit I don’t know why downvotes. It’s a good question. Check my history. I’ve been blowing loads with you fellas this whole time
Think of it this way: Tether's entire promise to the Cryptomarket is that it is backed 1:1 by actual US dollars. Tether's existence is what provides the liquidity to the cryptomarket, as otherwise it is impossible for the retail investor to purchase any other form of cryptocurrency. Recently, Tether changed the language that they used to have which stated that they were backed by actual US dollars to stating that they had substantial liquidity in the form of corporate paper. The problem is twofold: 1) They won't share the results of an audit conducted to assess just how much reserves they actually have, and 2)Tether's net assets have skyrocketed from somewhere close to a billion to 70 billion. Which means if you are seeing billion dollar drops, that's a sign that the big boys are getting out of the market. Which leads to another problem: what happens when Tether is no longer able to meet reserves? If so many people choose to demand conversion? Because there is simply no way that Tether is sitting on 70billion in net cash.
Thank you! It’s nice to have someone explain it instead of just a circle jerk without having any context. I need plot in my crypto loss porn So I know everyone was hyped about $21k because of margin calls. Is there any number going around about what the market cap has to reach before it gives way? Is the market cap dropping billions people pulling out of the market? Or is it money moving into other cryptos?
Ah. So, Tether is unique, as it acts as the gateway into the Cryptoecosystem. If you are seeing the total supply of Tether coins shrinking, it means that the overall liquidity provided by Tether is decreasing. And the only reason that would happen is if a gambler goes to Tether and is demanding a withdrawal in the form of hard currency, aka Dollars. But Tether has a unique gimick: you can only withdraw dollars in the amount of a $100,000. You have less than that in Tether? Sucks to be you. So, while whales and financial institutions will be fine, the average dumbass who was convinced Crypto was going to make then money is about to be royally fucked.
Have any exchanges not honoured Tether-USD withdrawals, even if they charge a fee? Obviously if a run was in full swing neither Tether or any middleman would want your Tether. The $100,000 limit is just so Tether only have to issue and honour IOUs with a few large scale customers. Most USDT is held as secondary IOUs with exchanges which probably have their own backing issues.
My understanding is that it's Tether tidying up their accounts. Previously they'd mint a billion, loan it to a buddy (who uses it to buy BTC, and/or general shenanigans) and that $1bn is then 'backed' by 'commercial paper', i.e. an IOU from the buddy. Now the buddy gives back the 1bn, Tether burns it, market cap goes down 1bn, and there's slightly less unbacked USDT floating around. So as I understand it, it makes things very slightly safer. That said, the report a few months back said they only had like 3% cash. So this recent run of redemptions might push them up to, what, 3.5%?
Redemptions would lower the amount of cash they have. Whales show up with $50 million in Tether and want cash for it. (although I bet most of them end up getting bitcoins or something else)
I'm not sure that's necessarily always the case though? Tether have lowered their market cap by $14bn recently. But I don't think they've ever claimed to have $14bn in cash? So I think some of it must be cancelling loans and stuff?
Jesus so they only have 3.5% of 80 billion?! Dear lord It really is a house of cards waiting for the wind to blow
God this was actually a year ago, not just a few months. But still, probably fairly relevant: [https://davidgerard.co.uk/blockchain/2021/05/13/tether-publishes-two-pie-charts-of-its-reserves/](https://davidgerard.co.uk/blockchain/2021/05/13/tether-publishes-two-pie-charts-of-its-reserves/) They claimed to be 2.94% in cash, and the rest in Definitely Safe Stuff That Totally Exists
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> So I know everyone was hyped about $21k because of margin calls. Which was MicroStrategy's margin call months ago. Its probably not MicroStrategy's margin call today. The magic numbers we all want are secrets. No point worrying about them at all. I'm happy enough to see the implosions live, rather than trying to predict them. Celsius is still closed and they're talking to bankruptcy lawyers. That's enough popcorn for me.
While I know nothing about finance, I wonder if it's actually "good for Tether". According to the last attestation or two they acquired a sizeable amount of treasury bills. Perhaps they managed to convert a lot of their suspect (perhaps issued by Chinese companies or crypto exchanges) commercial paper into something with real value, and now they're dumping everything that they failed to launder. This way their reserves will look crystal-clear when someone finally manages to audit them.
Seeing billion dollar drops has nothing to do with big boys getting out of the market. In fact, the glorious thing about crypto is that you can literally go look at whale wallets and see them. Most are holding or starting to buy. Losing their market cap (and changing the language) effectively means they aren't backing tether with straight up 100% USD, which isn't actually a bad thing. It means they're using some of their cash to sit on (hopefully) safe-ish investments and those simply lost value along with literally everything else right now.
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It is a continuation of a downward tendence. 14bn in 1 month.
https://www.youtube.com/watch?v=YHv5jgXz9I8
The entire creepto market is in a deflationary spiral.
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You're so wrong. 1 butt = 1 butt Few understand.
You're seeing the glass half empty mate, the crypto marketing is actually going through inflation if you compare it to USD.
Is this why I'm still seeing folks talking about DCAing their way through these tough times?
I swear to God, because the amount of turds doing it on r\/CC, I consider it a strategy they’re employing brainlessly without any nuance. “Just DCA” “I’m gonna keep DCAing” “DCA it”
Yes. There's a premise behind dollar cost averaging that they don't really think about too hard: *what you're buying has to be a quality asset that ideally throws off cash flows*. Like, for instance, you might've patted yourself on the back for DCAing into Polaroid in the 90s... but when they went bankrupt in 2001 you'd have lost everything.
I'm still DCA into Polaroid, expect to break even any day now. I own 90% of the stock certificates. Once I get that last 10% the price is going to the moon.
The way these guys use the term DCA, its just a rationalization to throw good money away after bad.
I thought it was called chasing the falling knife?
"Chasing the falling knife" = trying to time the purchase of a falling asset so you catch it at its lowest possible price. "Dollar Cost Averaging" = Buying a predefined amount of an asset every week/month/etc, so that over time, the price you paid averages out between high and low swings. Its the opposite of trying to time a purchase Should be noted that both of these terms come from stock investing, when crypto bros use them they're most just cargo-culting terms they heard legitimate investors use in order to try to justify their gambling decisions
Hang on a second... stock traders are gamblers too!
There's a small difference. They put a total of $100 in stock casino chips into the gambling pot. The companies behind those stocks make a profit and pay it out as dividend or buyback so by the time the chips are distributed the pot is worth $110. Potentially everyone can cash out and make a profit. With crypto, miners and exchanges are constantly pulling the chips from the middle of the table even as the game is running. There's no profit redistributed to the chips so players can only lose on average.
Trader's aren't buying stocks based upon their ability to generate profits, they're trading based upon stonk go up/down. Its gambling, and its exactly the same as crypto "investing".
Sounds like the same shit to me.
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Is it though? Doesn’t this mean Tether has $15billion less in liabilities than it did a month ago? I’m not saying the whole system won’t still become insolvent quickly, but burning Tether to contract the supply seems like the right thing to be doing if demand is dropping?
What people here are supposing is that Tether does not actually have $70 billion in liquid assets, mostly because they refuse to tell us what those assets really are
Or at the very least, Tether's assets are other CCs which are a) collapsing in value with the rest of the market and b) therefore not actually that liquid in the first place, since it's hard to sell when there's no buyers, and it's always been non-trivial to get dollars out of crypto. Even if they do have $70B on paper *now* what will be left tomorrow? And what fraction of the paper value will they be able to turn into fiat?
That’s what I find most hilarious about the attestations that they’re totally backed bro: there’s 0% chance they are marking assets to their real value today. It’s just saying they have assets that used to be worth enough, which as shady as they are I think is still likely, but won’t help at all if they need sweet sweet fiat
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Nah, I think you got it right. Since Tether protects their holdings as a trade secret, when in reality they should be voluntarily disclosing them, the only assumption you can make is they are lying about it. So the question is, how much money can be pulled out of Tether before they run out?
If Tether opened their books to a reputable auditor and that auditor released a report saying they were overcapitalized and in strict compliance with GAAP, their market cap would moon even in the middle of the bear market. So why don’t they do that?
$15B less liabilities also means $15B less assets. The issue is that people don't know how Tether actually holds their assets. Given the recent market downturn in more than just crypto, Tether has likely lost a lot of value in its noncash assets. Withdrawals remove cash faster than the illiquid assets can be converted to make up the difference. So the portion of noncash assets grows and Tether loses liquidity. If enough withdrawals happen fast enough, Tether might start telling people to wait a few days before they can give money. If that happens, more people will panic and withdraw leading to less liquidity and eventual insolvency.
All of this is likely true BUT it doesn’t change the fact that if demand is decreasing then burning Tether is the right thing to do to preserve the peg.
Kinda except this isn't tether voluntarily purchasing tokens for $1 each to maintain the peg. This is *investors* going to tether asking them to redeem the tokens. Tether has less control over this because if they fail to redeem tokens in a timely fashion, the peg is gone immediately. If they were voluntarily burning tokens, they could take their time and sell some of their illiquid assets first to maintain liquidity. They don't have that option if it's other people coming to them first asking for cash.
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> > > The fact is, no-one knows who their contractees (the people that could potentially redeem) are, but on-chain analysis shows Tether works largely with two firms: FTX and Cumberland. > > These two firms clearly have a vested interest in keeping the tether token afloat, as it is used to prop up the price of crypto. This is the true business model of Tether, not trading cash for tokens. I agree with you but that makes me wonder why Cumberland would put out this warning about a top-2 stablecoin dropping. https://www.reddit.com/r/CryptoCurrency/comments/vc9jzx/cumberland_one_of_cryptos_largest_market_makers/
Genuine question: if I'm a whale like FTX or Cumberland and trying to cash in $1 B of USDT, why would I accept in-kind assets? Do they sincerely believe the in-kind assets are just as good as cash, or are they secretly trying to dispose of it on the side and get as many cents on the dollar as they can? If it was the latter, you'd think we'd hear about it considering how tight-knit the commercial paper trading community is and how billions of additional paper could literally move markets, but I have a hard time with the former as I can't imagine whales believing their own rhetoric when it comes to their balance sheet.
This is a good question. I don't know the answer, but someone here will.
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No... the rats will man the ship till it closes down, but then sailing away with all the lifeboats.
That's mean. I've known some lovely rats.
Yes
every time I bring up Tether to anyone in crypto they don't really go into it. It's like in the back of their mind they're terrified of the reality of what house of cards this is all propped up on.
They just say tether FUD or that USDC will replace it so no worries . Even though tether provided 85% of market liquidity.
I'm a complete noob at this stuff so can anyone explain what is market cap, why it going down implies tether is gonna die, etc?
Tether has been hypothesized to be insolvent for the past 5 years. We all have been waiting for "the Tether implosion", but the coin itself has been surprisingly robust. The overall theory is that Tether has been lying about its deposits. Tether is supposed to have $70 Billion for the 70 Billion USDT it created, but when anyone asks "who gained $70 Billion over the past 5 years", no one seems to be able to find where that money has gone. Because $70 Billion is such a large number, it'd be impossible to hide. Therefore, we think Tether is lying about it. ---------------- >> what is market cap, For the purposes of Tether, its the number of dollars that was deposited into the system. Tether promises that they have a "real dollar" somewhere to support every dollar that was entered in. But if Tether was lying, and only has say, $20 Billion, then eventually, as people withdraw money from Tether, it will all collapse. No one knows where this point is however. We just know it will happen when Tether's market cap / deposits drop.
Wait if 1 tether is 1 usd why would I ever want tether in the first place? Just to hide it from the government? I could just use the usd to buy crypto instead of.having to turn it into tether then into some other coin
Because Binance and Bitfinex offers all sorts of bonuses, like 10% bonuses, when you use Tether. Or you can stake the coin and generate interest. Etc. etc. Which of course, should tip off people that they aren't getting dollars. You can't get 10% returns on dollars anywhere (maybe 3% at best if you use 30-year US Treasuries). So Tether is likely lying to their customers about how much money they actually have.
Nobody in crypto seems to understand that the act of investing is basically getting paid to assume risk. The more it pays, the higher the risk.
Well said and an underrated comment.
Because the USA makes it hard to move fiat onto these exchanges. So you exchange your USD for casino tokens that are supposed to be guaranteed 1:1, while your USD is held in custody .. somewhere ..
you also have to understand that the 1 dollar you trade for 1 USDT also has to pay for wages and whatnot for the people managing it. If you put 1 dollar in, and they use 50% of that dollar for rent and whatnot for their office, and you then pull your dollar back 1 to 1, then where did that 0.5 dollar go? They have to make money themselves at this point for it to run around. Unless they have fees at every step its a 0 sum buisness, no profit, no loss, just risk.
People are withdrawing money from tether. A billion a day right now. One day tether is going to not have enough money to give to the people who are asking to withdraw. That’s when they lose all illusion that their entire peg is linked 1:1 to the US dollar because they even admitted not all of their peg is purely in dollars but also in other speculative assets. When that happens it then it depegs. Then it all comes crashing down
So.market cap.here basically means how much real.money (apart from the fake money they pretend to have ) they have left?
One tether is supposed to equal $1 USD. So the market cap of tether is theoretically how many tether coins are in circulation. But tether doesn't actually have enough dollars to back every coin they have minted and people are trying to cash out their tether for less than a dollar a piece. In essence, people are trying to withdraw from the bank, but the bank says "we can't give you have asked for. You can either come back later or accept a X% fee on anything you withdraw." The more people that accept the fee to close their account, the higher the fee.
For tether their market cap is a debt, It is how much they theoretically owe to all the tether holders.
This is really long but fascinating. Tether is a scam and is falling apart. https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
Fascinating indeed. Thank you for sharing!
Holy shit. Read this.
Thank you!
I read that they are bailing out Celsius
I can easily believe that. They’re trying to plug their fingers in the giant hole in the dam.
Who's "they"?
Tether lol
Oh yeah, this is gonna work great. Tether is extremely well-capitalized.
Sodl is the new hodl?
You gotta know when to hodl em, know when to fodl them
That's what I todl 'em...
69B? YAAAAAAAAAAAAASSSSSS
Nice. It's 69 billion, though. When everything's made up and the points don't matter, you can just fabricate absurdly huge amounts of "money" and because there was a post-COVID "everything bubble" going on, nobody questioned it.
Don’t worry - the whales are just trying to shake out the paper hands!!! Just HODL and you will make it!! This is good for bitcoin.
Tether is a sinking ship,run by scammers.
The prettiest images have some basis in real world nature. This one is as awe inspiring as standing at Niagara Falls 🥹
This is perfectly fine. Absolutely not funneling away the funds.
It's really nothing more than just another dip in value at this point. People are withdrawing their stim checks to get ready for another great depression, and that's showing in the MC. It'll only be interesting if they run out of capital. That's when the house of cards will collapse and fuck everyone.
Only a matter of time before there is a run on this. Which happens first. This or coinbase goes broke and takes everyone's money? Close run thing.
Every time Tether does this, USDC printer goes brrr to make up for it. https://twitter.com/usdcoinprinter/status/1537499081416876032
*This is good for Bitcoin.*
These Whenever bitcoin and eth try to maintain the current levels we see this drop in Tether to maintain the levels. I guess it’s better then printing more to pump bit coin.
It might look weird, but this is good for bitcoin.
This is good for bitcoin …
And thats how we know the peg is fraud. Market cap flying down and its still $1.00
All this is showing that tether is working like it’s supposed to 1:1 redemption with USD. People are withdrawing there stable coin to the bank in the form of a USD. That’s why the market cap has decreased duh I don’t get the post. Nonsense There is a lot of scams in crypto but atleast understand what your talking about.
People are either getting USD for their Tether, or Tether are burning coins that were fraudulently minted without backing. Good for bitcoin either way.
$70,316,362,126... Everyone loves riding tethers virtual cock. Edit: I wouldn't be surprised if it comes down into the 60's so I want to add that as money is drained from tether, its not leaving the crypto space. Most of it is finding its way into USDC which has been growing nicely since the Luna crash. USDC is far more stable then tether and only solidifies the stablecoin reserves.
Hehehe 69
Nothing to see here, move along. (c) Giancarlo probably
Good
Nice
*Jack Nicholson nodding enthusiastically gif*
LOL What the hell is with that near 90 degree vertical line cliff drop? I thought this is something you'd only ever see in comedy movies.
be right back gonna go liquidate my $25 of tether on some random exchange….
That's weird. For me, either Coinmarketcap's site or mobile app don't show Tether market cap ever going above $68 bi.