Tether Backing Problem

[HammadAli]

As claimed by tether.to, every USDT is backed by traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.(Quoted from tether.io website).

So basically with every passing year the value of USDT is decreasing due to the inflation caused and ending in decreasing the buying power of USDT. So i am not going to invest or convert my Bitcoin into USDT which is backed by FIAT.

Bitcoin is increasing with respect to USDT but it has to cater for inflation as well so a holder can be in profit. We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

[VanDeinsberg12]

As claimed by tether.to, every USDT is backed by traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.(Quoted from tether.io website).

So basically with every passing year the value of USDT is decreasing due to the inflation caused and ending in decreasing the buying power of USDT. So i am not going to invest or convert my Bitcoin into USDT which is backed by FIAT.

Bitcoin is increasing with respect to USDT but it has to cater for inflation as well so a holder can be in profit. We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

It caused by not all of exchange sites having fiat pair feature. Only the major exchange sites that acquire license from the regulator to add direct trade to the fiat pair.
To be able provide the fiat pair feature and exchange site must talk about the lawyer about the and the potential of the problem that will come from the regulator. Remember about what happened with china if china has already banned trade crypto used yen as a trading pair.

So many people are using tether as a middle pair between yuan and crypto because to trade yuan directly to the crypto has already prohibited from a few years ago in china. There must be a lot of reason to explain what they are still using tether or another 3rd party token.

[Herbert2020]

i don't know why you use the term "invest" for tether since it is like saying "invest in dollar"! that doesn't make any sense. tether has its purpose in the altcoin market and that is to provide a stable "crypto" currency that altcoin traders use for only two things. first is to use it as an escaping tool whenever altcoins are dumping hard so that they can preserve their value. and second is to use it whenever they want to transfer fiat between exchanges but not use banks due to banking system problems such as high fees and possibility of blocking your account.
if you are using USDT for anything other than these two, then you are doing it wrong!

Bitcoin is increasing with respect to USDT but it has to cater for inflation as well so a holder can be in profit. We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

we do have BTC/USD markets and bitcoin value is measured against USD and that is what majority of traders have always been using!
it is only recently that some altcoin exchanges wanted to enter the high volume and safe market of bitcoin that they started adding BTC/Tether markets and only do that because they didn't want to get involved with KYC that addition of USD would bring.

[desticy]

Personally, I am worried that the Bitfinex exchange is constantly being attacked by the law, and it is USDT that is now the most common analogue of the dollar.
If something happens to the company owning Tezer, for example, bankrupt or a tax arrest, what will happen to the market? And bitcoin itself. There are many options.

[avikz]

As claimed by tether.to, every USDT is backed by traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.(Quoted from tether.io website).

So basically with every passing year the value of USDT is decreasing due to the inflation caused and ending in decreasing the buying power of USDT. So i am not going to invest or convert my Bitcoin into USDT which is backed by FIAT.

Bitcoin is increasing with respect to USDT but it has to cater for inflation as well so a holder can be in profit. We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

Technically USDT is built to cater the need to worldwide crypto traders! It is not built to HODL in any way! Otherwise they wouldn't have called as stablecoins! Stablecoins values are built to be stable and not to fluctuate! So they are an essential part of the ecosystem that provides convenience to traders in a crypto driven environment. USDT is one of those rare cryptos whose trading volume often increases its market cap! So you can easily understand the use of USDT from this statistics! It's just a convenient coin to trade because it's really painful to use actual fiat currency in majority of the crypto exchanges! It's as simple as that!

[confreslamp]

Those guys are printing air, because only a certain percentage of USDT is backed by real assets, which makes around 30 percent of useless printed air, with each new emission. They know how to make money out of nothing.

[dothebeats]

I have always doubted Tether’s claims of being fully backed by the dollar and/or any assets to be fully functional and keep their value no matter what. They have been targeted by a lot of scrutiny but apparently people are just good in turning a blind eye over what appears to be a serious case of deception perpetrated by them. I never keep my funds in USDT, only during transfers from one exchange to another, and that only happens very rarely as most of the time I never really trade on different exchange.

The notion that USDT will keep your assets intact against bitcoin’s volatility isn’t true, and I believe that it’s more dangerous to do it that way since you’re betting on Tether’s truthfulness and nothing else. Keep your funds as is or convert to fiat rather than imaginary tokens that are supposedly backed by fiat.

[Febo]

As claimed by tether.to, every USDT is backed by traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.(Quoted from tether.io website).

So basically with every passing year the value of USDT is decreasing due to the inflation caused and ending in decreasing the buying power of USDT. So i am not going to invest or convert my Bitcoin into USDT which is backed by FIAT.

Bitcoin is increasing with respect to USDT but it has to cater for inflation as well so a holder can be in profit. We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

Well fiat backing of tether is not only problem that tether backing have. Most important problem is if there is enough tether. You cant be sure but you need to believe third party. Blockchain asset is perfect and simple for digital asset. When it come to real world asset like gold, land money or whatever it come to the problem. You need to trust third party that really hold that real world asset, to actually give it to you when you want.   What happens if they bankrupt?  Court will take all that asset away. Blockahian consensus will be totally  powerless. With digital asset there is no law that can go beyond blockchain consensus. It cant be stopped.

[electronicash]

Isn't USDT on ETH and we can send them out to an etherwallet?

although i always have doubts to bitfinex after the issues raise against them because of tether, i kept using it for many of us are still using it. there isn't any option to retain the value of your BTC unless you move it to a stablecoin either USDT or TUSD or any other which will have similar issue. it would be good to have it converted to paypal funds but for the unbank or without bank accounts anymore, its only the stablecoin that is the option.

[salty]

Good question.I think that with the help of USDT it is simply faster to make transactions.And if a ,,digital,, dollar appeared on the market, then everyone would use it in the same way as USDT.

[ChrisPop]

You are able to trade directly against USD on exchanges like Bitstamp for example. You have your own USD balance in your account backoffice and you're able to withdraw to your bank account any time you want to do so. USDT is just a faster way to move money and I wouldn't trust it. Tether seems to me and I'm sure to other people as well - very shady. They're not transparent enough with their backing and holdings. In business you want trustworthy partners and tools. For me Tether is not to be trusted.

[CryptopreneurBrainboss]

We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

Well when the idea of stablecoin came out, the community needed a way to minimize losses when bitcoin or the cryptocurrency market in general is depreciating but most exchanges weren't offerings the options to convert cryptocurrency into fiats (USD etc) so the idea of a coin backed by the fiat currencies operating on blockchain came out. That's as a cryptocurrency enthusiast (trader) you don't need to convert your coins to fiat to avoid further losses instead your funds are been stored in stablecoins which also operates using the blockchain technology. So technically you're not leavings the blockchain space unlike when you store funds using traditional currencies.

The reason why stablecoin like USDT (although not a fan of this particular stablecoins) are preferable is because it makes transaction easier, faster and cheaper when compared to the traditional banking system. You can operate stablecoins quite easily without having to care about security clearance just as the banks request most times.

[leowonderful]

Many exchanges also use Tether so they don't have to deal with plain fiat currency and thus also so they don't have to mess with AML/KYC which is implemented on most major fiat cryptocurrency exchanges. Makes things more simple for both the exchange, and might also potentially attract customers who want to stay somewhat anonymous while still trading with a reliable token that doesn't easily change value.

I also absolutely agree that you shouldn't be holding Tether or really any other stablecoin for extended periods of time. If you're not actively trading that money, it makes much more sense to just convert it over to plain fiat and keep your money there. There's most definitely risk associated with Tether and even other stablecoins that are considered to be more reputable, and given one main advantage of these coins is easier transfer between exchanges, if you're just holding the stablecoin that's now eliminated.

[tenakha]

As claimed by tether.to, every USDT is backed by traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.(Quoted from tether.io website).

I agree with you about not to use the USDT, but because of the possibility of scam, not for your opinion: https://www.forbes.com/sites/francescoppola/2019/03/14/tethers-u-s-dollar-peg-is-no-longer-credible/#6337c3bf451b

So basically with every passing year the value of USDT is decreasing due to the inflation caused and ending in decreasing the buying power of USDT. So i am not going to invest or convert my Bitcoin into USDT which is backed by FIAT.

Bitcoin is increasing with respect to USDT but it has to cater for inflation as well so a holder can be in profit. We need USD/BTC pair not USDT/BTC pair. Why should one trader rely on a third party token when he can trade directly the USD.

We are ultimately forced to use centralized exchanges, which we already encounter with third parties, even if not USDT.
Obviously, it is not possible to understand what your rebellion is. As if the USD itself is a masterpiece.

[oktana]

USDT already has a reputation as a third party although it is still in short-term speculation, stable coins similar to tether have not been able to compete with it. USD cannot be affiliated with many exchanges because of regulatory issues, so it's quite clear why it's not used much. Regarding inflation etc. not yet a serious point because the average user only uses it as a quick transaction in securing the value of their assets.