Tether's market cap is huge! (usdt)

[Karartma1]

Tether to me seems to be the scam of the century. I believe there are way too many better stablecoins like Binance's USD (BUSD) to convert into, but as I can see that it can't be used on too many websites (especially on gambling and casino sites which are mainly targeted by USDT users as well as probably no direct purchases) is the reason here why tether has been a big hit.

It's not just Tether, though.  Any privately owned currency is problematic, since you have to trust the entity that claims they're holding the funds.  I'm staying away from all stablecoins that consist of tokens supposedly backed by private wealth.  They're all effectively IOUs.

are there any stablecoins that don't fit that definition? most people think DAI is decentralized, but DAI is actually majority backed by centralized assets like USDC, PAX, and WBTC. there are huge third party risks involved.

the way i see it, different stablecoins come with different risks:

• the odds of USDC or GUSD becoming unpegged due to insolvency (like a bank account getting seized) is extremely low because their issuers are super compliant in terms of licensing and AML. the odds of that happening to USDT are much higher.
• however, the odds of USDC or GUSD becoming infungible (or having your account closed or being reported to regulatory authorities) is much higher than with USDT, since tether and bitfinex are much more lax with AML/KYC stuff re secondary markets.
• "decentralized" stablecoins like DAI represent another risk: bad smart contract execution, bad governance, network congestion, etc can cause unexpected and catastrophic losses, like the $4.5 million lost in DAI during the crash in march.

This post deserves another quote because you stated very simply what are the real issues behind so-called stable coins. If people aren't able to see the real dangers here there's not much that can be done but I think writing this over and over again may help a few to see the truth behind those fiat currency digital artifacts.

[Psynthax]

I use Tether as a crypto-fiat gate only, not for long term storage, so I don't worry about my USDT holdings, they are relatively small.

This actually the best use case when it comes to these stablecoin as a temporary way to store our money really. Basically a place to resort when we gonna cut lose while market getting dumped fast. But the idea of a stable coin having this kind of humongous market cap is kinda disturbing although that's only my opinion. Honestly USDC or any other stablecoin should really give a competition to USDT by increasing listing in most of market. USDT is already too comfortable being most preferred stablecoin just because the simple fact that its listed everywhere.

[DooMAD]

are there any stablecoins that don't fit that definition? most people think DAI is decentralized, but DAI is actually majority backed by centralized assets like USDC, PAX, and WBTC. there are huge third party risks involved.

the way i see it, different stablecoins come with different risks:

• the odds of USDC or GUSD becoming unpegged due to insolvency (like a bank account getting seized) is extremely low because their issuers are super compliant in terms of licensing and AML. the odds of that happening to USDT are much higher.
• however, the odds of USDC or GUSD becoming infungible (or having your account closed or being reported to regulatory authorities) is much higher than with USDT, since tether and bitfinex are much more lax with AML/KYC stuff re secondary markets.
• "decentralized" stablecoins like DAI represent another risk: bad smart contract execution, bad governance, network congestion, etc can cause unexpected and catastrophic losses, like the $4.5 million lost in DAI during the crash in march.

Plus, if governments are looking to pursue CBDCs, every single private stablecoin is at risk from regulatory pressure.  CBDCs won't need to compete with stablecoins for market share if stablecoins are simply legislated into obsoletion.  I think their days are numbered.

[figmentofmyass]

Plus, if governments are looking to pursue CBDCs, every single private stablecoin is at risk from regulatory pressure.  CBDCs won't need to compete with stablecoins for market share if stablecoins are simply legislated into obsoletion.  I think their days are numbered.

with libra diem launching next month, things are heating up. libra is what got congress really talking about crypto regulation, and i have a feeling it's about to thrust it to the forefront again. the bitcoin bull market is accelerating things too.

there is always a chance that governments tread lightly in favor innovation in the DEFI space. wouldn't that be nice?

[Betwrong]

My take on Usdt has always been the same, I've been consistently saying that tether is a ticking time bomb in the crypto world.
For what it's worth, IMHO tether is doomed. Whenever CDBC regulations will be set forth, Tether is about to explode. Don't worry though, Bitcoin will survive this event too.

Well, I can’t help but worry about it, because if by "survive" you mean "1 BTC will always be equal to 1 BTC", I'm not exactly happy with that. Being paid for some jobs in BTC, I don't want my hard earned $500 turned into $50 one day.

[DooMAD]

with libra diem launching next month, things are heating up. libra is what got congress really talking about crypto regulation, and i have a feeling it's about to thrust it to the forefront again. the bitcoin bull market is accelerating things too.

there is always a chance that governments tread lightly in favor innovation in the DEFI space. wouldn't that be nice?

Maybe they'll maintain a light touch approach while CBDCs are still in the research stage, but I can't shake the feeling their priorities will change if CBDCs ever reach the production stage.  I suppose that's still a big "if", though.  Part of me thinks these central bank currencies won't get off the drawing board for another 5 - 10 years.  The corporations need to use their head start wisely.  There's a remote possibility that if Diem is successful and can gather a large enough global userbase before any government coins are launched, it's conceivable that governments would just co-opt that system instead of attempting to recreate it themselves.

[mindrust]

My take on Usdt has always been the same, I've been consistently saying that tether is a ticking time bomb in the crypto world.
For what it's worth, IMHO tether is doomed. Whenever CDBC regulations will be set forth, Tether is about to explode. Don't worry though, Bitcoin will survive this event too.

Well, I can’t help but worry about it, because if by "survive" you mean "1 BTC will always be equal to 1 BTC", I'm not exactly happy with that. Being paid for some jobs in BTC, I don't want my hard earned $500 turned into $50 one day.

This is one of the problems of BTC. People still want the USD not BTC. Everybody value their goods in USD not in BTC.

Even most of the BTC believers(!) are after more USD and that's the only reason they invest in BTC.

[Vishnu.Reang]

with libra diem launching next month, things are heating up. libra is what got congress really talking about crypto regulation, and i have a feeling it's about to thrust it to the forefront again. the bitcoin bull market is accelerating things too.

there is always a chance that governments tread lightly in favor innovation in the DEFI space. wouldn't that be nice?

For me, this is very fishy. Why the congress is so concerned about Libra/Diem? After all, it is a centralized digital currency and is more similar to digital versions of fiat currency such as PayPal. It is a hint that the politicians are not very comfortable with the rise of Bitcoin and other decentralized cryptocurrencies. Libra/Diem is just a diversion. The real target may be Bitcoin.

[DooMAD]

For me, this is very fishy. Why the congress is so concerned about Libra/Diem?

Same reason they didn't like the Liberty Dollar. 

Described by some as “the Rosa Parks of the constitutional currency movement,” Mr. von NotHaus managed over the last decade to get more than 60 million real dollars’ worth of his precious metal-backed currency into circulation across the country — so much, and with such deep penetration, that the prosecutor overseeing his case accused him of “domestic terrorism” for using them to undermine the government.

Of course, if you ask him what caused him to be living here in exile, waiting with the rabbits for his sentence to be rendered, he will give a different account of what occurred.

“This is the United States government,” he said in an interview last week. “It’s got all the guns, all the surveillance, all the tanks, it has nuclear weapons, and it’s worried about some ex-surfer guy making his own money? Give me a break!”

[Tushar Ramani]

I am worried about my funds in USDT. I think I have to move to USDC or BUSD.

Same here, already halfed my USDT and exchanged it to USDC.
Not so worried, thats just a rational safety call

I don't know why you guys continue to hold your wealth in the form of stablecoins. USDC is not safer than USDT. All the stablecoins are risky and holding them may result in huge losses for you. If you want to store your wealth, then store it in the form of Bitcoin. Obviously the risk of volatile exchange rate is there, but IMO this risk is lower than keeping the wealth in the form of stablecoins.

Its not about keeping wealth in USDT. Stable coins like USDT, USDC comes into the picture when someone wants to sell high, wait for dip and buy low. It is obvious that USDT is not one kind of investment but it helps to accumulate wealth one possesses.

[so98nn]

You're right. The team has not even disclosed its price to remain $1. Here are a few points to look at the other side:

• 20B circulation with nothing backed
• No proof of funds either
• Banking partner on the Bahamas
• Lawsuits are pending
• No physical operation location
• Without any regulation
• Prints n x USDT like feds

I am worried about my funds in USDT. I think I have to move to USDC or BUSD.

That is some serious shit man. It could be very disastrous if any one of the point goes wrong from the above list that you made.

At this point tether is like tip of ice burg on the verge of imbalanced posture and the cause could be anything from above. I don't know why but since the bitcoin has risen in the price most of the people have secured their assets in the USDT and that's ridiculously heavy burden on this firm. Im not sure how they will maintain the price to optimise the USD rate but if anytime huge dumping starts they will have hard time doing so. And that legal petition is also heavy risk for this project including no physical location can have law suit filed more stringently.

[Betwrong]

My take on Usdt has always been the same, I've been consistently saying that tether is a ticking time bomb in the crypto world.
For what it's worth, IMHO tether is doomed. Whenever CDBC regulations will be set forth, Tether is about to explode. Don't worry though, Bitcoin will survive this event too.

Well, I can’t help but worry about it, because if by "survive" you mean "1 BTC will always be equal to 1 BTC", I'm not exactly happy with that. Being paid for some jobs in BTC, I don't want my hard earned $500 turned into $50 one day.

This is one of the problems of BTC. People still want the USD not BTC. Everybody value their goods in USD not in BTC.

Even most of the BTC believers(!) are after more USD and that's the only reason they invest in BTC.

I totally understand your point, and I wish I could say "I'm a hard-core hodler" about myself, but in reality I am not, sorry. I have bills to pay, family to feed. Of course it would be great if we could forget about fiat completely, and all payments were in BTC only, but it's impossible at the moment.

That being said, I respect people that can afford holding their BTC. I realize that they are doing good for Bitcoin.

[Vishnu.Reang]

Its not about keeping wealth in USDT. Stable coins like USDT, USDC comes into the picture when someone wants to sell high, wait for dip and buy low. It is obvious that USDT is not one kind of investment but it helps to accumulate wealth one possesses.

If someone want to do that, then why can't they keep the balance in USD or EUR in the exchange itself? What is the point in converting USD to USDT? I know that storing your funds in exchange is a very risky option, and there is a good chance that the exchanges may close down suddenly taking your funds with them. But storing your money in USDT involves the same amount of risk, as it is a token issued by the Bitfinex exchange. 

[suzanne5223]

Its not about keeping wealth in USDT. Stable coins like USDT, USDC comes into the picture when someone wants to sell high, wait for dip and buy low. It is obvious that USDT is not one kind of investment but it helps to accumulate wealth one possesses.

If someone want to do that, then why can't they keep the balance in USD or EUR in the exchange itself?

As said by Tushar Ramani USDT came into the picture when traders are making losses when the is dumped and there's no way to keep their profit but I'm not a fan of USDT though it is the pair used by most exchange site and conversion into USD/EUR will also attract another fee. Besides, what's the purpose of crypto if investors decide to hold USD/EUR instead of stablecoins?

What is the point in converting USD to USDT? I know that storing your funds in exchange is a very risky option, and there is a good chance that the exchanges may close down suddenly taking your funds with them. But storing your money in USDT involves the same amount of risk, as it is a token issued by the Bitfinex exchange. 

Yes and this is the reason why i am not a USDT fan but holding USD/EUR is not an option since we have other decentralized stablecoins in the market.

[magneto]

I was scrolling through cmc and I didn't realise until now that tether has the 4th highest market cap at ~$20bn. This feels like a really high risk asset and that's probably reflected in it having a 5x market cap daily trading volume.

It's probably just something to take note of that if it isn't physically backed and we see massive volatile moves then don't trust it to peg the dollar especially if it keeps getting a higher and higher pool of funds that are thought to control it (its a shame a lot of sites use it in futures).

Definitely. And IIRC there was actually a change in their T&Cs just a few years back that allowed them to essentially do fractional reserve and count non-cash assets as reserves even though their initial mantra is that USDT should be backed 1:1 by physical cash.

It is essentially a bank without a banking license, if you think about it. And I think that will be liable to falter for sure come some sort of liquidation crisis/bank run.

I would not use USDT for any more than day-to-day transactions, as the market's high turnover of the token seem to suggest. Do NOT use it as a store of value. But even then, there is a risk at any instant that the fractional reserve is going to collapse.

[Sithara007]

Now everyone has seen what lawsuits can do to cryptocurrency, after XRP lost 60% of its value in a single week. With the NYAG litigation against Tether not settled yet, why no one is considering such a possibility with USDT? There is a real chance of their remaining assets getting confiscated, if the NYAG believes that the Tether foundation indulged in some sort of fraud with the reserve funds.

[fullhdpixel]

This is basically exactly the same situaiton as XRP is going through right now and what Bitmex went through as well. When you are doing a financial business and you are not registered in USA but deal with a lot of American citizens you are going to get into a lot of trouble, which is why I have repeatedly said that USDT is in big trouble, tether will be not only sued by every usa government branch available but they will be investigated and there will be a loooong jail time for the owners. Why?

Because if you are dealing with American citizens you need to pay your taxes in USA as well, if you do not want to do that you need to bribe the right politicians so that they could keep you from harms way, if you both make your profit from mainly Americans and do it in a financial corporation while not paying any bribe at all? You are going to end up in jail for sure (or at least can't go to USA anymore).

[bearexin]

I have not used that USDT in a very long time now, but there are lots of people that are making use of it and Tether is like the most popular stablecoin in the market, a lot of traders are making use of it and they don’t even consider other good stablecoins there are out there. Tether is no longer fully pegged to US dollar so why would anyone continue and they have also have a lawsuit against in New York, it’s like a serious and I have been seeing questions popping up everywhere online on how this is going to affect the market if they happen to collapse. This is the best time to look for the coins that are reliable.

[South Park]

To me Tether is just an extra unnecessary risk traders take. I wouldn't trust a company to hold my funds. I barely trust the fortune 500 companies to manage funds because they have an interest aka to make a profit. And they have to obey a lot of regulations.

It is not unnecessary in the sense that it allows you to get out of the market of cryptocurrencies for a time and the ability to get back in it immediately, if you have tried to actually send your money to your bank account you will know what I mean, supposing everything goes smoothly when you sell your crypto for fiat then you could get your money in a few days, but we know a lot can happen during that time making you lose precious time, in the worst case scenario your account is blocked for using cryptocurrencies and you now nee months to get your funds back and have to go through a lengthy legal battle to get your money, so as you can see even if I do not like USDT myself I can see why it is useful.

[DooMAD]

there are lots of people that are making use of it and Tether is like the most popular stablecoin in the market, a lot of traders are making use of it and they don’t even consider other good stablecoins there are out there. Tether is no longer fully pegged to US dollar so why would anyone continue and they have also have a lawsuit against in New York,

It's very much a "path of least resistance" kinda deal.  Regardless of how shady it looks, traders want the liquidity.  It's shortsighted and risky, but it's convenient.  They'll keep using it until it blows up in their face.