- This topic has 10 replies, 2 voices, and was last updated 6 months, 2 weeks ago by Next_Breadfruit_1090.
- Sunday, May 15th, 2022 at 00:19 #273620How_To_LibertyParticipant
It seems that UST shitting the bed was a wake up call for a lot of people about shady stablecoins.
We all saw a few days ago when *seemingly* the panic caused tether to temporarily lose its peg, at one point dropping to a terrifying 0.95.
But that’s not all. If you look at some other stablecoins (at least those that are still stable) around the same time, you can see a pretty clear correlation to them all spiking during the moments that USDT was losing its peg. While this is just a correlation, and I certainly wouldn’t be the one to dig through historical trading pair data to find a causal link, this could indicate people trying to convert their tethers into other stablecoins.
What’s more, is that it seems since the depeg, tethers have been burning at an unprecedented rate. Before the depeg tether’s market cap peaked at ~83.2 billion, but since it has dropped to ~76.5 billion.
A drop in the bucket for now, but historically speaking it looks a bit more drastic.
This isn’t necessarily a cause for alarm. But if people (mostly whales and exchanges) are really finally trying to get rid of their tethers, and this keeps up long enough, we’ll see a ‘run on the bank’ kind of situation, in which Tether doesn’t have enough USD for everyone trying to redeem their tokens, and the long prophesied Tether implosion finally happens.
Or I could just be panicking based on some coinmarketcap charts. We’ll see how well this post ages.
What do y’all think?
**EDIT:** Just dropped about another billion.Sunday, May 15th, 2022 at 00:27 #273630Next_Breadfruit_1090
Buying LunaSunday, May 15th, 2022 at 00:29 #273628zafiroblue05
Tether has largely regained its peg, but remember this—
*if Tether is actually backed 1-1 by assets, then every Tether could be redeemed and the peg would hold all the way down.
*if Tether was backed by, say, 80% (with the other 20% either stolen or lost to bad loans), then it could potentially hold the peg for weeks at the current (crazily high!) redemption rate, only to the suddenly and immediate go to zero.
And we have no idea which of the two is happening right now.
(In practice, it isn’t this simple, because whatever assets Tether has aren’t perfectly liquid — which is why it lost the peg before regaining it, and which means that if it actually was 20% short of assets it would begin losing the peg before it redeemed that first 80%. But the principle holds – Tether being deeply and fraudulently short of assets it claims to have is consistent with it currently mostly regaining its peg.)Sunday, May 15th, 2022 at 00:29 #273627confirmSuspicions
The collective crypto market decided that they’re too invested in stablecoins and/or too much is invested in a single stablecoin. People around this sub have been saying for months to swap out of tether to prevent a big collapse.Sunday, May 15th, 2022 at 00:31 #273624DrSkoolie
> A drop in the bucket
That’s assuming that tether is telling the truth and that their assets are liquid.Sunday, May 15th, 2022 at 01:05 #273622Calbruin
There’s a reason why they’ve never been fully audited.Sunday, May 15th, 2022 at 01:11 #273621haZyyskies
I didn’t understand the concern from a few days ago about Tether depegging because it’s pretty common on KuCoin, Gemini, and other exchanges to see USDT and USDC range between 0.98 to 1.01, but what does concern me is what OP wrote about, the dropping marketcap of USDT over the last few days.
I remember reading a while ago that BlackRock either owns, or is partnered with the creator of USDC. I could see BlackRock making efforts to turn USDC into the main stablecoin of the crypto market and destroying all competitors.Sunday, May 15th, 2022 at 01:41 #273629Wubbywub
we all know tether is problematic but most people still use them cause of futuresSunday, May 15th, 2022 at 02:12 #273623payfrit
this is a concern and tether is going to fail before the end of May.Sunday, May 15th, 2022 at 02:25 #273625cmdrshepherd1993
Personally, I like DAI.Sunday, May 15th, 2022 at 02:33 #273626MrArtless
Dude obviously it wasn’t just correlated it was because they were literally selling tether for other stables you could watch it play out live on binance
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