A look at the reserves backing the three largest stablecoins in the crypto-conomy.
We need Jerry McGuire in there, “show me the money, Jerry”!
Excellent report sir!
Load zhe Tether fud....
I still don’t get how it’s so popular. Why would anyone want USDT over USDC, or even DAI?
Thanks for the report - but nothing new here. And realistically speaking: it is both unlikely and operationally negative for the leading (or any) stablecoin to have real reserves.
Unlikely because Tether would have to be selling crypto to get cash to buy said reserves - which would be both noticeable and trackable; the amount of net cash spent to buy tether or any other stablecoin is probably very tiny compared to crypto.
Operationally negative because, for example, ETFs get front run all the time - it is inconceivable that Tether would not also get front run were it to really tightly couple reserves vs. activity.
So Tether is a faith-based fraud upon which FTX probably drew at least some inspiration. But ultimately, I have a hard time seeing this as being that much of an issue.
People don't buy Tether to make money; they buy tether to enter/exit other crypto. This function generates profit for Tether but ultimately its stablecoin is a function that would occur either way - and Tether's method sadly is probably more cost efficient than actually having the backing.
Or in other words, their shoddy and criminogenic accounting practice isn't going to implode or cause much systemic harm short of imploding, unless they do something particularly stupid like get caught red-handed stealing/misusing funds. Given the numbers of investigations to date that have come up empty, it seems that they're being smart about it.
Exceptional article. 2023 is going to be interesting.
Excellent article, thank you for all the work you do.
Now I have a question. Supposedly there’s a hedge fund (or funds) shorting Tether, which would seem to be a phenomenal trade from a risk/reward standpoint. How would one do this without entrusting capital to a centralized crypto exchange that can go up in smoke overnight?
Excellent reporting, per usual! Would also love to read your insights and learnings as to how Tether developed so much market share, so quickly. You alluded to one reason here and in another piece...it's ties with FTX. Thank you!
Alameda will not withdraw anymore USD from tether company. So they have been very lucky.
There’s gonna be a run on popcorn when this steaming pile of nastiness gets a sunlight bath. I for one am hodling my comedy Godl and fully intend to cash it in when Tether goes pop and all of the Hopium leaks out of the clown balloon.
Great summary as usual. Thanks, Dirty Bubble
Great summation. A good question is why Tether has such a large share of the market. Is there more to this story?
Great article dirty bubble! Fascinating