Don't trust Tether (USDT), it's very dangerous!

[chenille]

A well known stablecoin is Tether (USDT) and it has reached already a very high position on Coinmaketcap. Stablecoin suggests "stable" but it doesn't mean it is safe.
Nobody really knows if all USDT ist backed 1:1 by USD.

Wikipedia writes:

On 30 April 2019 Tether Limited's lawyer claimed that each Tether was backed by only $0.74 in cash and cash equivalents.

https://en.wikipedia.org/wiki/Tether_(cryptocurrency)

People holding USDT have a risk if USDT collapses to lose funds. Keep in mind, you should avoid USDT because people owning it have a high risk of holding a potentially fraudulent coin.
It is very concerning to see such fraudulent coins at such high positions at Coinmarketcap.

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[crwth]

Years ago, I remembered that the price of USDT went down, and it was all because of the news about the printing of USDT and not really backing it up with 1:1 USD. They had problems with audits and had somehow delayed anything with it. I remember them burning USDT, but they claim that it wasn't related to it whatsoever. We won't really know unless it happens already. Right now, the majority of traders are using it as well. If we are talking about all stable coins, I would recommend USDC, though.

[layoutph]

Good thing there are several coins that is USDT alike. If we cannot trust USDT we can use other alternatives. Thats why I do not put all my investment in crypto, if USDT failed, it can defame the credibility of crypto as a whole.

Tether is a centralized, controlled system. Such a system is against cryptocurrency standards. However, with no certainty about Tether's false allegations, we only have to wait for Tether's own financial report.

[zidanw]

I already read something before about USDT it shouldn't be trusted and you shouldn't hold it for a long time well they do have a point since according to what I read before it's about confidence and if the confidence is lost the price would surely drop.

[bitmover]

I totally agree that nobody should trust usdt.

Usdt is not a form of investment. You are borrowing money to bitfinex for free, with zero interest rates.
I know some people which buy usdt because it is easier to buy them usd in my country.

But usdt is not really usd, neither is USdc. Nobody should trust those tokens and we should use them only as a tool to make trades and transfers easier.

[NeuroticFish]

I'm happy to see this kind of awareness threads still pop up from time to time.
Indeed, it's well known that USDT is not properly backed (to say it nicely). Still most traders seem to don't care, some even recommend it.

Nowadays there are so many stable coins, tied to USD or not, the traders really have where to choose from. Most exchanges have their own flavor of "USD" coin. The stable coins not tied to exchanges may have lower acceptance, but may have better audit. However, since most are lazy, the easiest choice is to just pick the stable coin of a reputed exchange which has better chance for a proper audit (perhaps or Gemini, Coinbase?)

Anything else, just not USDT!

[atjiat]

I totally agree that nobody should trust usdt.

Usdt is not a form of investment. You are borrowing money to bitfinex for free, with zero interest rates.
I know some people which buy usdt because it is easier to buy them usd in my country.

But usdt is not really usd, neither is USdc. Nobody should trust those tokens and we should use them only as a tool to make trades and transfers easier.

In any case, USDT is not safe as a repository of fixed capital. No one can give a guarantee, despite the fact that 20% of all USDT is still backed by the dollar. And nevertheless, if you look at 2018 and 2019, when the market was experiencing huge difficulties, we confidently saved ourselves thanks to USDT without much loss.

[Cryptoababe]

I wonder why some people will prefer to hold usdt instead of using it to trade. I've been thinking about USDT being dangerous to hold also. Now, I know my thinking is right.

[Nhor1011]

USDT is good to use for trading and transfer but to hold I think it's not better. Maybe just hold for short period of time like one to two weeks is still fine but for long term I think it's not good and it's not trusted even it is a stable coin. If you want to use USDT to move money between exchanges or if you want to cash out, then it will be fine. And I think as long as many people use it, then I will also use it.

[Coyster]

People holding USDT have a risk if USDT collapses to lose funds. Keep in mind, you should avoid USDT because people owning it have a high risk of holding a potentially fraudulent coin.

+1 to that, tbh, I don't really see the reason why people hold USDT, it's not a form of investment as it's not a speculative coin that rises and can also plunge, i know it has its few pros, like for example it helps traders move coins faster and with lesser costs (fees), but if you want to hold crypto for the long term, it's better you do that with Bitcoin and not USDT, and if you want 'stability' (not that fiat even guarantees that), just convert your funds back into 'real' fiat currencies and not leave it in USDT that's centralized and vulnerable to manipulations.

[disconnectme]

I don't know why this FUD about Tether tokens is coming up again, the team claim they do not have the money backed by 1:1 because their funds was frozen but have since updated their terms, that it can now be backed by assets. If Tether falls, these could be the end for the whole space, people tend to forget all the good that Tether has done for the space

[zasad@]

People holding USDT have a risk if USDT collapses to lose funds. Keep in mind, you should avoid USDT because people owning it have a high risk of holding a potentially fraudulent coin.
It is very concerning to see such fraudulent coins at such high positions at Coinmarketcap.

The most interesting thing is that most of the coins are not backed by anything.
If you are asked why Bitcoin costs $ 19,000 and Ethereum $ 600, then you cannot answer.
Most of the stablecoins are used for speculation, and I don't think 75% of the owners will run to exchange them for fiat.
Maybe I'm wrong, but if 74% of USDTs are backed by US dollars, that's a good indicator.

[danglongbtc]

I totally agree that nobody should trust usdt.

Usdt is not a form of investment. You are borrowing money to bitfinex for free, with zero interest rates.
I know some people which buy usdt because it is easier to buy them usd in my country.

But usdt is not really usd, neither is USdc. Nobody should trust those tokens and we should use them only as a tool to make trades and transfers easier.

Yeah but sometimes, there can be a considerable gap between two trades. We may have to hold USDT for a quite some time.

[Dr.Osh]

well, I pay attention to this a lot. So, when I have USDT, I won't keep it in the long run. however, I often hear that USDT is only backed up by USD it's around 70% - 75%. however, we do not know what conditions will arise in the future. because of this, I always use USDT when I need it, not for the long term.

[NeuroticFish]

If you are asked why Bitcoin costs $ 19,000 and Ethereum $ 600, then you cannot answer.

Bitcoin costs $19k because people are willing to pay 19k US dollars for it.

If people would buy Bitcoin only for USDT like things, if Bitcoin would cost 19k of some thing that is later declared to worth less (or even worthless) because it's not backed, then sooner or later we'll have a bit problem: both, that coin and Bitcoin too will fall big time. That would mean we have the worthless scam bubble some are afraid we have with Bitcoin.

USDT allows now "fake" money flow get into the markets and this is not OK.


This is how I see the things. And this is why I don't like USDT around, unless they provide a proper audit that they are good (which for now I doubt).

[Sparrow96]

I agree with you. Tether is really very dangerous. Tether is centralized. It can freeze your assets. It can reverse your transaction. If you participate in their Token sale, you need to compromise with your Identity. Rest concerning issue - you already said. Tether isn't backed by USD 100%. This news led Tether to drop to 0.8$ level. I don't remember the exact price.

[el kaka22]

They have reclaimed after that period that they are 1 to 1 backed again, which was suspicious to say the least but it was at least a try to save face from them. I honestly think that best way to approach tether would be to be quick about it, they are stablecoins after all and you are not going to invest into it, so why keep it there for too long. If you want to trade, great you should, after that get far away from it.

However if you want to be in fiat for a long time, I would suggest withdraw your money in fiat form to your bank account instead of focusing on making some more money and be quicker about it to stay in USDT. What happens if one day they say all of their money was seized? Our money will be fully gone and each USDT will worth zero while over ten billion dollars is gone.

[cryptopediabd]

A well known stablecoin is Tether (USDT) and it has reached already a very high position on Coinmaketcap. Stablecoin suggests "stable" but it doesn't mean it is safe.
Nobody really knows if all USDT ist backed 1:1 by USD.

Wikipedia writes:

On 30 April 2019 Tether Limited's lawyer claimed that each Tether was backed by only $0.74 in cash and cash equivalents.

https://en.wikipedia.org/wiki/Tether_(cryptocurrency)

People holding USDT have a risk if USDT collapses to lose funds. Keep in mind, you should avoid USDT because people owning it have a high risk of holding a potentially fraudulent coin.
It is very concerning to see such fraudulent coins at such high positions at Coinmarketcap.

Tether is a controversial cryptocurrency with tokens issued by Tether Limited. It formerly claimed that each token was backed by one United States dollar, but on 14 March 2019 changed the backing to include loans to affiliate companies: https://en.m.wikipedia.org/wiki/Tether_(cryptocurrency)

[bitbollo]

it's another point that has discussed many many times during the years. for sure I am scared about this chance (just 75% of coins are backed by real FIAT) but I think it's something more risky their T&C that allow seize of funding for a lot of reasons. I am scared to use a service that could seize my fund or roll back a payment. Personally I am using bitcoin just to avoid all of this

[Twinkledoe]

it's another point that has discussed many many times during the years. for sure I am scared about this chance (just 75% of coins are backed by real FIAT) but I think it's something more risky their T&C that allow seize of funding for a lot of reasons. I am scared to use a service that could seize my fund or roll back a payment. Personally I am using bitcoin just to avoid all of this

This is one of my hesitations with USDT. When I read the article last year that they admitted that they are not 100% backed as what they claimed, I feel that when you are holding USDT, anytime it will crash by one wrong move coming from its management team. So yes, if you do need to use this stablecoin, better for short-term purposes not long-term one. You'll never know when will they admit again that they are not really fully backed by US$.