Will USDT be dead now after UST and Luna ?

[turbo_tiger]

I don't see why you should use USDT instead of USDC in any situation.

 

[SOCOM]

I read somewhere that USDT is connected to USD in the backend. We don't know about it, but it is connected to USD. If you observe closely, you would find that the value and rate of USD and USDT are always the same.
Hence, I don't think that USDT would ever crash. In my opinion, after Ethereum and Bitcoin, USDT is one of the most stable coins.

ETH and BTC are pretty dang far away from stable.

 

[PremiumAds]

Its no rocket science, UST was based off an altcoin, they tricked people into thinking it had any stablitity
USDT is backed by the USD, hence the name and why the price will not vary

 

[Cendla]

Currently using usdt can be risky.

 

[xReminisce]

I don't see why you should use USDT instead of USDC in any situation.

people are sheeps
and currently USDT is more popular than USDC

 

[Unreliable Witness]

I read somewhere that USDT is connected to USD in the backend. We don't know about it, but it is connected to USD. If you observe closely, you would find that the value and rate of USD and USDT are always the same.
Hence, I don't think that USDT would ever crash. In my opinion, after Ethereum and Bitcoin, USDT is one of the most stable coins.

Can you give us any links to that information?

My understanding is that roughly 31% of USDT is backed by commercial paper and/or certificates of deposit (source: Tether's own website as of today). In which case, it wouldn't have to be connected to USD denominated assets. We don't know what this commercial paper is (or rather who has issued it) because Tether goes to extraordinary lengths to prevent information about it from getting out.

The value of USDT against USD isn't always the same. Its varied recently.

The question is how liquid is USDT. If the holders of $74 billion wanted to exchange their USDT today, could Tether find that $74 billion? Or would the holders have to accept a lower value than 1 USD? If they would have to accept a lower amount then the coin isn't stable.

 

[Bots-Scrapers]

yes, they will die, save your money before you loose!

 

[blackbeans]

The question is how liquid is USDT. If the holders of $74 billion wanted to exchange their USDT today, could Tether find that $74 billion? Or would the holders have to accept a lower value than 1 USD? If they would have to accept a lower amount then the coin isn't stable.

This is what it all boils down to.
There will be a CRISIS OF TRUST if it turns out the $74 billion in hard assets isn't there.
The question is: just how VERIFIABLE is Tether's asset claim?

 

[Sunmoluvic]

Usdt is backed up by real assets, not some algorithmic based stable coin

 

[Hawkeye Digital]

USDT Is supported with BTC , Yet it would not die easily mate !

 

[onlinemarketer12]

Usdt is backed up by real assets, not some algorithmic based stable coin

Which real assets specifically ?

 

[dekadent30]

Dead USDT means all exchanges dead. Not possible. It would be end of crypto world. USDT is not algorythmic token like UST. It's backed up by dollars in theory.

 

[Trashtetic]

USDT is strong

 

[paisawaisa]

Dead USDT means all exchanges dead. Not possible. It would be end of crypto world. USDT is not algorythmic token like UST. It's backed up by dollars in theory.

It means that the exchanges are taking the wrong route. Depending on one coin completely is very risky, it should be spread between multiple coins.

 

[smmstore007]

USDT will stay strong

 

[sravan4u]

The issue isn't whether the assets are real, the issue is whether the assets could be liquidated at par if enough holders of Tether wanted to cash out within a short time period.

I could create commercial paper by incorporating a company and then exchanging something I own for a debt by the company. As an example, I could agree with the company that in return for an artwork I've created, it owes me $1,000,000,000. In accounting terms, that is a real asset. We could also keep the details of the deal secret.

Without knowing what commercial paper Tether holds you cannot be sure that it could be sold or exchanged for its supposed value. The question is if the commercial paper is really worth what Tether say it is, why not disclose that? You'd increase trust in Tether hugely and encourage more people to use it.

If the commercial paper turns out to be issued by companies in the crypto space (e.g. exchanges such as Bitfinex), then you'd understand why Tether is so reluctant to disclose that. If the value of the crypto market dropped suddenly (say an algorithmic stable coin ran into problems) and the exchange was holding those coins then the exchange might not be able to repay its debt if the commercial paper was called in. That would make Tether depeg, which would further destablise the company(ies) issuing the commercial paper, further destablising Tether.

In terms of valuation, its possible to pay an accounting firm in the Cayman Islands (which can't easily be sued if it is wrong) to value the commercial paper at a certain value. The accounting firm has an interest in making sure that it keeps its clients happy by doing what they want. And being in the Cayman Islands, the firm can't easily be sued by holders of Tether if its valuation is incorrect. So you can't really trust that an assurance opinion by an unaccountable (excuse the pun) accounting firm is correct. That is especially the case when more reputable international accounting firms (who I'm not saying aren't also open to bribes) have turned the work down. Its an easy fee to certify that the value of $1 of debt issued by a large blue chip company such as Google is trading at $1 after all.

That Tether doesn't disclose whose commercial paper it holds (instead calling it secret sauce) suggests that if there were a crisis and holders wanted to sell, they might not be able to sell for 1 USDT = 1 USD.

I don't know. I could be wrong. But the point is that only people at Tether know, which is a strange situation if everything was watertight.

Explained very nicely . I agree with you. But most probably ,since USDT existing for longtime , It's unlikely that it will crash like LUNA or UST.

 

[Unreliable Witness]

Explained very nicely . I agree with you. But most probably ,since USDT existing for longtime , It's unlikely that it will crash like LUNA or UST.

I'd argue that just because something hasn't crashed so far doesn't mean that it can't do so in the future.

I believe the reason it hasn't crashed is because it fulfills a critical role to whales who hold other coins, mainly BTC and ETH.

The cryptocurrency market in general isn't very liquid. If you're a whale its hard to cash out the hundreds of millions of dollars you hold.

Without Tether, if a whale sold a large amount of a coin, the market price of that coin would drop to the lowest price that the seller accepts (that is how any market works - the price is the price given in the last trade). Transactions like that would reduce the confidence from smaller market participants that the coin is worth holding. As a result, there would be less liquidity and prices would fall faster.

What Tether does is allow the price of coins to be maintained when whales sell. Tether can print money easily. It just needs to sell something (like a new digital image) to an undisclosed company in return for an IOU for a large amount of money from that company. There is no cash in that transaction - no liquidity. Tether can create $1,000,000,000 in new USDT by selling a JPEG created in 10 seconds (an artwork) to a company incorporated in a tax haven for an IOU. Tether can then exchange the newly minted USDT for the coin and because it does so at a higher price than the last cash transaction, the market capitalization of the coin is maintained. There probably aren't many people actually encouraging/complicit in this. But there are a few people who have a very strong interest in keeping prices high - exchanges (who take a percentage of the value of the trade) and whales who invested early who probably want to take profits.

 

[mazyar]

yes it is .. a crash is becoming certain.. every crypto value that is relay on fiat and actual assert crashes down soon .. you see terra proves that fiat asserts are not a good option for pig-up.. terra blockchain was not a tricky one .. every expert admits the genius behind them.. so suddenly everything poof? because sdt pig on $ not on their value...

 

[timothywcrane]

I don't know. I could be wrong. But the point is that only people at Tether know, which is a strange situation if everything was watertight.

FUDD - Fear, Undesirability and Definite Doubt

 

[bitrexF]

I will sorry for missing the first bull run of BTC from 8k up to 54k. To prove a statement, I will bring it here. I suggest you start buying BTC because 1 BTC will go over 80k this year, and ETH will pass the benchmark of 5.6k per 1 ETH. About USDT, I think they can't screw around because this is an asset of exchanges and is under watchdog or USA authorities. Much money from the USA is invested in crypto assets, which will remain secure for an extended period. Elon Musk is not stupid, nor Facebook or Bill Gates.