Thoughts on USDT?

OrganicBriefcase

OrganicBriefcase

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I recently went down the Coffeezilla rabbit hole on USDT and its potential danger for a market collapse. If you haven't seen them, it's a few videos, but you can click here to watch the most thorough one on the topic. The gist of the video is simple, USDT's marketing usually claims they are backed 1:1, when in fact, they are backed (with true liquid assets) only 3:100.

Multiple whales pulled out of the coin a few months ago making its market cap drop by several billions of dollars. Are we just waiting for the day enough people run for the door for this entire market to collapse? And if it does, do you think it'll ripple into the rest of the market?

I have not continued holding any USDT since watching this, and only purchase the coin when I intend to immediately use it for a payment for something else. Very curious to hear what this community's thoughts are on the topic.
 
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According to me the problem with cryptos is that, for now, their value is not backed by anything, yes, the official currency of El Salvador is bitcoin, but this does not change anything, the point is, apart from trust and the community, cryptos are just like any other financial product, is pure speculation, 10 years ago when Hal Finney, Nick Szabo, Musk and all these created the first blockchain, the technology was totally revolutionary, today anyone is able to develop a blockchain or a layer 2.

In short, I believe in blockchain technology but the crypto market looks very bad to me.

I hope I am wrong, an important part of my savings is bitcoin :rolleyes:
 
TarArAis said:
According to me the problem with cryptos is that, for now, their value is not backed by anything, yes, the official currency of El Salvador is bitcoin, but this does not change anything, the point is, apart from trust and the community, cryptos are just like any other financial product, is pure speculation, 10 years ago when Hal Finney, Nick Szabo, Musk and all these created the first blockchain, the technology was totally revolutionary, today anyone is able to develop a blockchain or a layer 2.

In short, I believe in blockchain technology but the crypto market looks very bad to me.

I hope I am wrong, an important part of my savings is bitcoin :rolleyes:
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You make a lot of valid points here! I also have faith in the concept of crypto, but the amount of bad actors in the game has made me very hesitant to dip heavily into the market myself.

One big difference between Bitcoin and USDT however is that USDT claims that you can always pull out and get paid 1:1, a claim which they used to reinforce to the extent of saying that all USDT could be pulled out at any time without a problem. Investigator findings point to a different reality, where if enough people go for the door, eventually no money will be left and all remaining holders will lose everything.

USDT is big but doesn't even represent 5% of Crypto's volume, but as the tool people use to jump in and out of this space, I wonder how the market would react to such an event. I hope it never happens however! A lot of normal people would be hurt.
 
USDT is quite safe, as Tether can and actually does "print" as much USDT it wants to, on an ongoing basis. Tether has the ability to "pull" or "push" USDT, to ensure it remains pegged to the US Dollar.
What need to be worrisome is what if the US Dollar crashes ? And that is not an impossibility considering recent global "happenings".
As far as USDT goes, the possibility of the US Dollar crashing is much higher than the possibility of USDT crashing.
Ofcourse, if the US Dollar crashes then everything pegged to it would also crash.
 
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OrganicBriefcase said:
You make a lot of valid points here! I also have faith in the concept of crypto, but the amount of bad actors in the game has made me very hesitant to dip heavily into the market myself.

One big difference between Bitcoin and USDT however is that USDT claims that you can always pull out and get paid 1:1, a claim which they used to reinforce to the extent of saying that all USDT could be pulled out at any time without a problem. Investigator findings point to a different reality, where if enough people go for the door, eventually no money will be left and all remaining holders will lose everything.

USDT is big but doesn't even represent 5% of Crypto's volume, but as the tool people use to jump in and out of this space, I wonder how the market would react to such an event. I hope it never happens however! A lot of normal people would be hurt.
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Of course! that's what I mean by not being backed, the dollar is sometimes better sometimes worse, but they can print more, yes inflation is skyrocketing, but the dollar is a safe-haven currency, I'm certain that no one can back the USDT 1:1 forever, it is impossible, it's...

 
Well the thing why everyone seems to not trust Tether is because of the history that it had and the actions that it is taking.

They attempted to cover their losses with BitFinex.

https://www.reuters.com/article/us-...cryptocurrency-cover-up-charges-idUSKBN2AN1NM
They refused to subject themselves to federal investigations and instead went forward with issuing audit reports only.

I mean it’s not really true to say they aren’t safe, but the fact that they have been involved in shady dealings and lack of transparency is a case for concern. Considering that they have exposure to Celsius, UST/Luna, backed by other cryptocurrency in reserve just makes them a big Voyager that is too big to fail.

If USDT depegs, all crypto investors get pegged.
 
if another situation like luna happens, crypto assets continue to be used as of payment, not an investment tool.
but that means bursting a big bubble. we would watch big market die...
 
USDT, DAI and USDC, this is all my money in, then I have many other Crypto that accumulate.... but those stables are what I live and invest from,
 
unless the focus is on the actual utility of crypto other than an investment / trading commodity, then crypto would really hold it's value.
 
mrBH000 said:
What about busd?
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Custodied by Paxos
Audited by Withum
Regulated by New York Department of Finance

https://www.paxos.com/category/binance-faq/
https://www.paxos.com/category/custody-faq/
https://www.paxos.com/is-paxos-audited/
https://www.paxos.com/attestation/https://www.paxos.com/is-paxos-regulated/

Paxos Trust Company has engaged Withum, a nationally top-ranking auditing firm, to independently verify at specific points in time that the entire supply of Binance USD (BUSD) tokens is consistent with USD in reserve accounts at U.S. banks held and managed by Paxos. Withum performs month-end attestations of these accounts using standards established by the AICPA. Every attestation report that has been published since the launch of BUSD can be viewed below.

Paxos is a New York State-chartered trust company regulated by the New York State Department of Financial Services (NYDFS).
 
OrganicBriefcase said:
I have not continued holding any USDT since watching this, and only purchase the coin when I intend to immediately use it for a payment for something else. Very curious to hear what this community's thoughts are on the topic.
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Good, you will go far
my thoughts
When least expected, it will plunge to it's deaths, could be in the next minute or could be in next year, htf knows.

Stay with USDC and BUSD
 
OrganicBriefcase said:
I recently went down the Coffeezilla rabbit hole on USDT and its potential danger for a market collapse. If you haven't seen them, it's a few videos, but you can https://www.youtube.com/watch?v=-whuXHSL1Pg the most thorough one on the topic. The gist of the video is simple, USDT's marketing usually claims they are backed 1:1, when in fact, they are backed (with true liquid assets) only 3:100.

Multiple whales pulled out of the coin a few months ago making its market cap drop by several billions of dollars. Are we just waiting for the day enough people run for the door for this entire market to collapse? And if it does, do you think it'll ripple into the rest of the market?

I have not continued holding any USDT since watching this, and only purchase the coin when I intend to immediately use it for a payment for something else. Very curious to hear what this community's thoughts are on the topic.
Click to expand...
same as with FTX.
Once shit comes out to the open, crypto will tank HARD,, everyone will rush to the exit but few will get out alive while all others will get burned.

Keep gambling or hodl. Pick your poison
 
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