[POLL] What is the risk of Tether (USDT)?

[theymos]

Some say that owning USDT is risky, and I'm wondering what the wider community thinks about this. I have my own opinions, but to avoid biasing the result of the poll I won't go into that right now.

[1715337261]

1715337261

[2bfree]

I have never used it sounds like shady to me.

[rodalutor]

One of the main worries I have with USDT is what would happen if the market was really collapsing and crashing? USDT isn't particularly supported by anything other than a promise so if suddenly bitcoin crashed and everyone converted BTC to USDT first and then tried to convert USDT to USD we would have a huge rush of people trying to sell USDT, at this point would the 1:1 ratio hold or would the value of USDT crash? I suspect it would crash and in the worst case scenario I see it becoming almost worthless. I do on occasion use USDT as I do not believe such a scenario is too likely so I take the risk but I would never hold a large part of USDT for a long period.

[Quickseller]

Owning USDT is essentially the same as owing USD on bitfinex. Ownership of bitfinex and tether has significant overlaps, and more importantly, I believe the management of the two companies have overlaps. Although holders of USDT were unaffected (assuming they were not held on the bitfinex platform) when bitfinex was hacked last August, so one might argue the risk of loss is a subset of the risk of owing USD on bitfinex.

There has been a lot of what I believe to be baseless speculation that USDT is being created 'out of thin air' in recent months, however I don't think this is more more than FUD by who is likely a competitor to bitfinex. This can be largely debunked by looking at market prices of USDT/USD on exchanges that trade this pair, and the xxx/USD price on bitfinex verses xxx/USD on other exchanges. With the xxx/USD prices being generally the same across bitfinex verses other exchanges, it is reasonable to believe withdrawals of USD on being processed off of bitfinex and tether, as if they were not, the lack of this ability would eventually result in arbitrators being unable to sell BTC on bitfinex and the price would be above that of other exchanges.

The risk of owning USDT will need to be multiplied with the risk of how the USDT is being held. For example, if you assume a 1% chance of loss resulting from holding USD on bitfinex, and a 5% chance of loss resulting from holding money on polo, you multiple 0.99 times 0.95, which results in a 5.95% chance of loss of holding USDT on polo.

Many people say it is not a good idea to hold money on an exchange because of the risk of hacks, however holding USDT does hold real benefits, primarily the less violative value than is associated with bitcoin, among others.

[Suslived]

I believe it poses the SAME risk as having ANY coin on an exchange. USDT is only as good as USD if the exchange does not fold up and run away with your money. That being said, that risk is the same for all other coins invested in that exchange. So i'm saying its as safe as any other crypto coin on an exchange.

P.S. Nice to see the forum administrator active.

[phantasma19]

this had been an issue ever since I got into trading, but there wasn't one single incident when tether showed significant problem that would greatly effect the market.

[Youngmoneymilita]

  Makes sense but you still run the huge risk of losing it all

[nik9990]

he has minimal volatility, I keep him for a quick purchase of various coins in my opinion promising growth

[vv181]

Tether is at 1.03$ every time bitcoin crashes, but back to 1.00$ when he stabilized again.
it's a bit hard to understand but this how it works, USDT worth more than USD (Meaning that we are actually getting less USD), when its time for bitcoin to recover USDT suddenly equal to USD or very close of it. So how do you think, who get the 3% difference in the end?

I noticed it the hard way, now when I predicted bitcoin is coming down I immediately send my bitcoin to the exchange that offers real USD.

[Donaldturp]

Tether is at 1.03$ every time bitcoin crashes, but back to 1.00$ when he stabilized again.
it's a bit hard to understand but this how it works, USDT worth more than USD (Meaning that we are actually getting less USD), when its time for bitcoin to recover USDT suddenly equal to USD or very close of it. So how do you think, who get the 3% difference in the end?

I noticed it the hard way, now when I predict bitcoin is coming down I immediately send my bitcoin to the exchange that offers real USD.

I know it was 90-95 cents in mid 2017 during a bitcoin crysis or bank crysis between tether and american banks. I don't understand the mechanism  like you don't understand. It's hard to solve the system of its price mechanism, somebody, a tether official should explain this to the community.

[justin86]

It's quite risky, but still I hold some usdt because we need such stable coin. Honestly, holding 600 million dollar in banks just because it is a business is risky, I know tether has faced many problems with banks so far.

[TheQuin]

Stupidest coin ever, it will not grow so no profits, and it can fail, so no profits and possible total losses. The value same as USD, why not just have a visa.

Because you can transfer them from exchange to exchange.

I'd say they are little riskier than holding USD but you can very quickly convert them into BTC so it's not so bad overall.

[crypto jerk]

Well hey, it's the censorship king of bitcoin information taking time to interact with us lowly scum.

Tether has made many many claims about transparency and audits that never happened. Kinda like you theymos who made many claims about needing piles of bitcoin to improve the site that never happened but kept them anyway.

I remember an interesting serial poster who you banned who went on a rant about tether being a house of cards. Bottom line is tether seems to be a shell game and the parent company habitually pisses off banks and gets their accounts closed making deposit and withdraw nonfunctional for tether.

This hack just puts the spotlight on tether and gives people the opportunity to question this scheme. Kinda like if for some reason the bitcointalk donations you accepted for site upgrades got stolen, it would put the spotlight on how you have a conflict of interest by being the head censor for bitcoin internet information.

[Riddikulo]

As I can suppose, especially after the events with hacking of Tether, it is the same risky as keeping money in bank. Meanwhile, ask guys here why they prefer to own USTD, and they will answer you that all operations with crypto are cheaper and faster to them.

[unusualfacts30]

I have heard people say the same thing but I'm not sure what's their reason behind it. I think it's fine to hold it as long as you're not holding it for months and market crashes on you. I would worry if I have to hold it for a long time which I don't so Im good. I usually sell my alts for usdt if market is shaky.

[Gracie12]

tether I think the biggest risk is the team to issue additional coins, as has been said for some time before bitfinex issuance of tether led to volatile futures contracts.

[KingScorpio]

tether I think the biggest risk is the team to issue additional coins, as has been said for some time before bitfinex issuance of tether led to volatile futures contracts.

i intensively studied tethers whitepaper,

they are highly recentralising risk buy storing so many US dollars and people are unawre about that, american companies quickly declare bankcrupcy but the problem currently is that people still evaluade their economic success in US dollars, and not in other currencies, or assets. since its so fancy to now use blockchain technology to avoid the banks watching you, or at least the law enforced banks, this problem realises itself

they are scamming everybody, buy claming they have the reserves which they dont have, now they have a billion USD in their reserve which actually no one will remove... why dont we all create tether style businesses.

is someone here interested creating another US dollar/Fiat tether, this can be realised quite quickly actually? pm me.

[bitpop]

Yeah like they seriously have a bank account somewhere with $1 BILLION.

Like millionaires were sending them $100 million a week.

And even if they did, they're getting raided for selling USDt.

[deepblue01]

Tether idea reminds me BitUSD and BitCNY, which was traded on Polo.

that is bad idea. BIG risk and it will break everything.
we should start campaign to ban tether USD by us, it will be disaster for cryptocurrency price when tether USD colapses.
this tether is freaking me out when i see  their marketcap  is going bigger everytime and never fall.
i might decide to stop holding anycrypto this year and waiting till tether colapses or will no longer used as fiat currency

[liangweicha]

One problem the USDT has always had is exchange USD.
It is not easy for many investors to give feedback to the USDT as USD, and the account of USDT is not open, but it has been issuing new USDT, and there may be some manipulation of the market.