USDT is shady. USDT is not depegging. USDT FUD is a classic bear market move. Whales make a killing swapping USD for USDT and pocketing 5% for zero risk.
It feels like we'll just keep repeating the same story of tether depegging, without anyone actually looking at the redeem process and what would it truly mean for USDT to depeg.
What you're seeing is USDT-USD slip on an exchange that provides that trading pair. As it is with any other traded asset, if all of a sudden you get this huge demand for USD trading, to the point that the liquidity dries up, of course this will push the price up. Take that graph and zoom out, perhaps looking at 5 year scale. This slip actually happens once or twice a year, depending on the FUD that's on the market. Market is in extreme fear with cataclysmic level events occurring (Celsius and Terra events are close to what happened to banking in 2008 or worse) weekly. Obviously every news will cause increased sell pressure on USDT and eventually arbitration between entities will not occur fast enough.
Now let's look at what happened during the last "depegging". Price dropped to .90 cents per dollar and after a while it returned to 1 USD. Look at the circulating supply of tether - in the aftermath of Terra people actually cut 20% of all supply of USDT and converted it into alternative stable coins BUSD (by Paxos/Binance) and USDC (by Coinbase/Circle) being the primary benificiaries of the flows.
Now let's look at the "depegging" claims. Tether would need to not honor the promise of USD payout when you send them USDT. BitFinex is the exchange thats behind tether and you can redeem tether for USD. During the height of the last "depegging", you could always send your USDT there and get USD back at ~1:1 ratio (https://trading.bitfinex.com/t/UST:USD?type=exchange).
While we can talk about the USDT reserves and we can talk about shady/enron level practices and the court trials, we can also say that after 5 years of they have yet to break USDT. They've cut 20% of their circulation without breaking a sweat. USDT will not crash until there is a bigger functioning alternative. All the key players will ensure that; it's game over for crypto otherwise.
USDT is shady. USDT is not depegging. USDT FUD is a classic bear market move. Whales make a killing swapping USD for USDT and pocketing 5% for zero risk.
It feels like we'll just keep repeating the same story of tether depegging, without anyone actually looking at the redeem process and what would it truly mean for USDT to depeg.
What you're seeing is USDT-USD slip on an exchange that provides that trading pair. As it is with any other traded asset, if all of a sudden you get this huge demand for USD trading, to the point that the liquidity dries up, of course this will push the price up. Take that graph and zoom out, perhaps looking at 5 year scale. This slip actually happens once or twice a year, depending on the FUD that's on the market. Market is in extreme fear with cataclysmic level events occurring (Celsius and Terra events are close to what happened to banking in 2008 or worse) weekly. Obviously every news will cause increased sell pressure on USDT and eventually arbitration between entities will not occur fast enough.
Now let's look at what happened during the last "depegging". Price dropped to .90 cents per dollar and after a while it returned to 1 USD. Look at the circulating supply of tether - in the aftermath of Terra people actually cut 20% of all supply of USDT and converted it into alternative stable coins BUSD (by Paxos/Binance) and USDC (by Coinbase/Circle) being the primary benificiaries of the flows.
Now let's look at the "depegging" claims. Tether would need to not honor the promise of USD payout when you send them USDT. BitFinex is the exchange thats behind tether and you can redeem tether for USD. During the height of the last "depegging", you could always send your USDT there and get USD back at ~1:1 ratio (https://trading.bitfinex.com/t/UST:USD?type=exchange).
While we can talk about the USDT reserves and we can talk about shady/enron level practices and the court trials, we can also say that after 5 years of they have yet to break USDT. They've cut 20% of their circulation without breaking a sweat. USDT will not crash until there is a bigger functioning alternative. All the key players will ensure that; it's game over for crypto otherwise.