Tether's USDT Stablecoin Slips from $1 Peg

[rippercushions]

And back up to 0.99 on Coinbase as I type this: https://pro.coinbase.com/trade/USDT-USD

Meanwhile, Alameda (SBF/FTX's trading arm) is apparently shorting Tether. https://twitter.com/mhonkasalo/status/1590665714490544128

Which is particularly interesting since they're known to be one of Tether's largest customers. The only rational explanation I can think of is that they think Tether is primed to tank, and they're trying to beat the rush to the exits like Goldman Sachs pouncing on Bear Sterns.

[throwaway294566]

Shorting tether can simply be a hedge against falling tether if you are holding large amounts. Doing that with stocks is completely normal and nothing to raise an eyebrow about.

[mjnaus]

Large holders of Tether would be pretty dumb to short it, as they'd be shooting themselves in the foot. If Almeda indeed knows something the rest of the market doesn't, they would (assuming rational action) quietly be exiting their position.

[irusensei]

Did I count the zeroes right? How is a 250k short worthy of notice. It’s more like FTX still gambling using the last scoop of their customer’s money.

[irusensei]

Everytime tether goes 0.99c these wishful thinking threads appear. No thread is created when the value is 1.01. Perhaps those fluctuations are the norm price on exchanges?

I’m not defending tether (I’m going to be downvoted to oblivion anyway because these types of threads are based on spite rather than logic) but it always have the “raises fist this time I got you spider man” vibe.

[zinekeller]

Actually, it went to ~0.95 (and apparently went 0.93 on a single exchange). 0.99 is not really significant (and is usually not pointed out anyways).

Correct me if my data is incorrect, but checking on historical data it seems that (except for its early days) Tether didn't went above 1.02, so that's maybe the reason that all of reports were dips?

[evdubs]

To add to this, USDT:USD reached $1.20 on FTX yesterday, and has spent most of today and yesterday above $1.01 with around ~$10M trading every hour. Even though FTX has halted withdrawals and is presumed dead, this type of trading activity is useful in understanding how stablecoin markets perform under extreme stress.

https://ftx.com/intl/trade/USDT/USD

[jpm_sd]

"A representative for Tether told CoinDesk in an email that issuer Tether Global is unexposed to both Alameda and FTX."

Well, except in the broader sense of crypto contagion. Tether is certainly exposed to BTC and ETH, both of which are plummeting this week.

[olalonde]

> Tether is certainly exposed to BTC and ETH, both of which are plummeting this week.

Why certainly? It would be quite remarkably dumb. In theory, a fiat-backed stablecoin is only supposed to be exposed to the fiat it is backed by.

[deweller]

I assume that holders of USDT are, perhaps, concerned that Bitfinex and Tether are similar to the FTT token. They may wonder if Bitfinex has Tether on its balance sheet and that the Tether is not actually backed by reserves as claimed.

In May, Tether weathered a significant liquidity crunch and recovered its peg by July.

[fabian2k]

I really don't know enough about this topic to judge the impact, but from the data I can see this looks like it depegged lower than in the previous incident that was widely reported. That one was to 0.995 and this one is to 0.990 (at the moment I looked it up).

[rocqua]

I believe the all time low of tether is 0.92$. So it has recovered from worse.

[sekai]

Yeah, it's a non-story, it's almost never exactly 1:1 in secondary markets.

[bhouston]

I am waiting for a panic spreading tweet from CZ. He has his own stable coin so it would make sense to spread panic here. But this may be giving the game away a little too obviously, so maybe now isn’t the time.

I do expect unless something else drops that Tether will survive this.

[oneoff786]

> He has his own stable coin so it would make a bit of sense to spread panic here.

Yeah that couldn’t possibly backfire

[SilasX]

It’s seeing significant borrowing on the DeFi platforms too, perhaps in anticipation of a price collapse (which would make it easier to pay back):

Aave, 60% to borrow: https://app.aave.com/reserve-overview/?underlyingAsset=0xdac...

Compound, ~40% to borrow: https://compound.finance/markets/USDT

[olalonde]

6 months ago as well: https://news.ycombinator.com/item?id=31349988

[dfc]

> USDT is trading at 97 cents on several bourses, and briefly fell as low as 93 cents on the Kraken exchange.

Is bourses crypto jargon I'm not aware of?

[logifail]

> Is bourses crypto jargon

Much older than that, it's more general finance jargon. The relevant definition[0] is:

"A stock exchange. (figuratively) Any place, real or imagined, where the value of a thing is settled."

[0] https://en.wiktionary.org/wiki/bourse

[lotsofspots]

It's a common term for a stock market in non-English speaking countries.

[matthewaveryusa]

Bourse in French means a sac/purse, scrotum, a scholarship, a market, and the stock market. Not sure what the origin is but it's not Latin.

Edit: It's from Greek inspired mediaeval Latin bursa meaning leather

[akmarinov]

It translates to market or marketplace

[kuratkull]

Strange that the price has dropped a lot less on Binance, to 99.8, while it's 97.x on Coinbase

[pjc50]

Presumably Tether run market-maker operations to stabilize it, but that requires keeping actually valuable cash at exchanges, which has its own risks. They can run out of firepower, and it's not as simple as it sounds to arbitrage between exchanges.

[oneoff786]

Looking like it might drop below 98 cents soon. Interesting

[Lionga]

97 cents on Kraken now

[johnebgd]

It finally has begun.

[ndsipa_pomu]

https://xkcd.com/1656/

[matthewaveryusa]

Is this the same as breaking the buck?

[rippercushions]

Yes, if it sticks, but Tether has had a couple of scares before and bounced back.