66% of all Tether (USDT) have been printed in the last 6 months

https://coinmarketcap.com/currencies/tether/

by daolf • 5 years ago

47 77 5 years ago

coinmarketcap.com

nicolashahn• 5 years ago

Because the dollar supply has also skyrocketed in the same time period.

yorwba• 5 years ago

66% of all dollars were printed in the past six months?

qeternity14• 5 years ago

No - M2 increased by 20% in 2020.

There is no connection to USDT issuance. As Michael Saylor, famed Bitcoin bull, says: no institutions and using Tether. Tether are printing it out of thin air.

Bitcoin bulls know this and they rush to hand wave away Tether at every turn.

shuckles3• 5 years ago

Is this trying to say that the primary destination of new dollars is cryptocurrency?

PragmaticPulp3• 5 years ago

It’s trying to imply that the dollar is collapsing and everyone is rushing for the exits, which isn’t true by any other measure.

These arguments are dishonest because they treat Bitcoin as a dual currency/asset but then only compare to the M2 money supply (currency) while ignoring the total wealth of the United States (including assets).

These arguments also confuse quantitative easing with traditional government debt spending, and they ignore that the stimulus money is designed to fill gaps in the economy left by COVID, in which case inflation would be negligible (although I think the US is overshooting that target)

They also ignore the fact that crypto isn’t the only exit for holders of USD looking to avoid inflation. They can invest in stocks or assets (crypto is a narrow subset of this), or they could exchange into the currency of another nation.

pmayrgundter2• 5 years ago

I don't know, but I think the destination is primarily the stock market for the past year. Maybe some also went to bitcoin.

- Fed open market operations: $2.8T introduced over 9 month by the Fed in 2020[1].

- Stock market (DJIA) run-up in 2020: $2.2T [2]

I don't think this can be just correlation, even on the simplest reading of how the Fed OMO works, but there is debate about this[3].

[1] https://fred.stlouisfed.org/series/M1. I believe M1 money is a good proxy for the Fed's open market operations that would go towards the kind of asset purchases that would increase stock equity valuation. I'd appreciate any feedback on this

[2] DJI went from $22k on Mar 1 2020 -> $30k, for an $8k change by end of year. DJI had a market cap of $8.3T when it was at $29k Dec 2019[2.1], so 8/29=0.27. 27% of 8.3T = $2.2T.

[2.1] https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average

[3] https://economics.stackexchange.com/questions/12226/does-the...

ur-whale5• 5 years ago

Because the dollar supply has also skyrocketed in the same time period.

With the following difference:

USD is backed by guns, tanks, warships and missiles. And some actual tangible assets (a fraction of the mass of USD in circulation).

USDT is backed by a bunch of italian people that are very well-versed in: - the art of engineering financial complications - the art of running when the weather turns bad - a vague, unaudited promise of USD reserves.

Not a good thing.

throwaway4good2• 5 years ago

I thought some US prosecutors were going after Tether? What ever happened to that?

jcranmer• 5 years ago

The case is still ongoing (although note it's New York, not the US, that is prosecuting the case). As I understand it, Tether still has yet to provide the documentation requested by the New York Attorney General.

rkalla• 5 years ago

Was suppose to happen in Feb and now it's March =/

jMyles2• 5 years ago

I am absolutely befuddled. Why are we letting this happen? Who is holding this hot potato and why?

Drop tether now. The more people hold it, the more damage it will do when it implodes.

louwrentius2• 5 years ago

I agree. Also:

Drop Bitcoin now. The more people hold it, the more damage it will do when it implodes.

jMyles2• 5 years ago

Well there's a false equivalence for the ages.

RivieraKid2• 5 years ago

Agreed. Surprised there are so many Bitcoin lovers on HN and in the startup scene, which is supposed to consist of smarter-than-average people. Bitcoin is basically shitty gold, because unlike gold, it has no intrinsic value and can go to zero, it's all based on fragile sentiment.

PragmaticPulp3• 5 years ago

In finance, no one complains about flawed schemes as long as everyone thinks they’re making money.

Enron was thought to be a market master until it fell apart.

Bernie Madoff’s clients were happy with their returns until the fraud was exposed.

The only difference in the cryptocurrency world is that a lot of the players have a suspicion that some parts of the system are powered by fraud, but they either wave it away (buyer beware / I can buy the dip if the market crashes) or they think they can get their money out before it really crashes down.

mrcggl• 5 years ago

Apparently the size of Tether seems huge, 34 B$ of dollar-denominate liabilities, but Binance, the largest exchange, has most fiat customer deposits in USDT. Moreover, in the last year futures trading has moved from Bitcoin margined to USDT margined and it is very profitable. So I wouldn’t be surprised if large funds are trading those future markets and they require USDT.

But offcourse it could still be insolvent if they issued too much or simply made insolvent if the assets (t-bills, cd) backing the issuances are frozen from US authorities. Just assume that as a known risk and plan accordingly

kanwisher• 5 years ago

Pretty sure Binance is now BUSD for all deposits, their own USD token

ur-whale5• 5 years ago

BUSD for all deposits, their own USD token

Which, goes without saying, is fully backed by USD reserves and properly audited ?

londons_explore• 5 years ago

Lots of people want to hold bitcoin, because it might be a great investment.

Lots of people want to hold USD, because it has the backing of the world's largest economy.

Nobody wants to hold USDT.

The only use for it is as an in/off ramp for bitcoin (where it is used only briefly). Or as part of a probably-illegal scheme where Tether Inc uses bitcoin as collateral to issue a loan to buy more tethers...

PragmaticPulp3• 5 years ago

Nobody wants to hold USDT.

If it exists, it exists in a wallet somewhere.

Presumably the Tether company isn’t creating USDT on the books just to keep it in their balance sheet.

It’s being held somewhere. Exchanges likely have a lot of it.

xur17• 5 years ago

Do you have evidence or is this all conjecture?

lalaland1125• 5 years ago

Another important takeaway from this data is that Tether is printing ~$500 million per day.

That's an incredible amount of (probably) fake money being pumped right into the market.

3 days of Tether is equal to Tesla's whole investment.

optimalsolver• 5 years ago

Tether's collapse will be to Mt Gox what Little Boy was to a firecracker.

arisAlexis3• 5 years ago

I wished people understood how Tether works. Bitcoin is up 6X this year , 600%. Many exchanges use Tether to onboard clients and that is why Tether is printed.

Tldr; Tether gets printed whenever Bitcoin demand goes up and that's in their whitepaper.

For downvoters: You are downvoting facts and truth, quite far from your scientific beliefs. Just read the actual whitepaper and then come and downvote. Don't repeat what you read or heard or think is obvious, obviously.

ur-whale5• 5 years ago

Tldr; Tether gets printed whenever Bitcoin demand goes up and that's in their whitepaper.

The theory is sound, but the experimental verification of the theory (an actual audit of USD reserves) is sorely lacking.

Plus, if you really dig into the history of the folks involved with Tether, I mean, I'm generally no fan of ad-hominems and generally willing to give people the benefit of the doubt, but in this case, the reek of fraud is overpowering [1]

[1] https://nicolaborzi.medium.com/the-lawless-rollercoaster-of-...

arisAlexis3• 5 years ago

did you google the article that says how they submitted papers to NY attorney that they are fully backed?

qeternity14• 5 years ago

I’m not sure you understand how it works.

Please explain to me exactly how Tether is used to onboard clients and how it gets printed.

arisAlexis3• 5 years ago

Just read their whitepaper and how exchanges use it before you downvote someone that has a different (correct) opinion than you. DYOR

mancerayder• 5 years ago

Is this still a thing? I thought we cracked down on Tether already?

Is that why BTC is 55k?

tomerbd• 5 years ago

2019 hackers - Bitcoin is going to collapse + downvoting anyone who beleive in bitcoin.

2021 hcakers - USDT is going to collapse + downvoting this.

boublepop• 5 years ago

Who is holding all this tether? I fully get the usecase of buying tether for usd, then going to an exchange to buy Bitcoin, there the exchange might briefly hold the tether, but would they not go back and convert the tether to dollars rather than hang on to it?

Or are we really in a scenario where the majority of the usd pumped into crypto are held by tether and only “IOU’s” at the exchangs? And a crash in tether would simultaneously pull a my gox on almost all exchanges?

qeternity14• 5 years ago

Users. Users are holding all of this USDT. Anyone with a dollar pnl on Binance and most other exchanges is actually holding USDT.

The exchanges don’t have any USD. They never did and they don’t have banking relationships to process USD anyway.

As to why anyone would hold USDT especially when there are better alternatives? They wouldn’t. But it’s not redeemable (Tether claim it is but it’s never actually been proven).

Fiat goes in. Tether comes out. And that’s irreversible. It’s an amazing scam.

marcandre• 5 years ago

Note that Kraken has a USD<->USDT trading pair, so it is convertible there (and only there AFAIK)

throwaway4good2• 5 years ago

That doesn't make any sense.

USDT is issued by Tether so if it is used by Binance, Binance would have had to buy it, assumingly from the fiat that went in.

fallingknife2• 5 years ago

75% of USDC, which is audited, has been printed in the last 6 months, so not surprising, or indicative of anything sketchy that USDT would be growing at a similar rate.

https://coinmarketcap.com/currencies/usd-coin/

qeternity14• 5 years ago

USDT and USDC are fungible. It’s almost a certainty that USDT has leaked into USDC.

Imagine this:

1) Print USDT out of thin air

2) Send USDT to Binance and buy BTC

3) Send BTC to Coinbase and sell for USD.

4) Convert USD to USDC

You’ve now turned imaginary USDT into what is properly backed USDC. Why do this? Because then you don’t have to worry about pesky USD money trails or bank account seizures.

fallingknife2• 5 years ago

But Occam's razor says it's probably just that a whole ton of money has gone into and trading volumes have increased a lot over the past 6 months.

doggosphere3• 5 years ago

Because then you don’t have to worry about pesky USD money trails or bank account seizures.

How do you deposit/withdraw into a legit exchange like Coinbase without having proper KYC?

doggosphere3• 5 years ago

I don't know what percent of Tether's funds are actually backed by USD. And I don't trust them as a company.

But lets look at the economic game theory of it:

- There is currently no premium on Bitcoin prices on Tether exchanges vs non-tether exchanges (http://www.untether.space/)

- USD/USDT pairs can be traded on legit exchanges like Kraken and are currently trading evenly

If the theory is that unbacked Tethers drive up Bitcoin prices, then we should see a premium on Bitfinex/Binance, because that's where buying demand should prop up first. A premium doesn't exist at the moment.

And further, lets say Tether is exposed and crashes. We would expect that users race to buy Bitcoin with their bad USDT and withdraw. The only bag-holder is whoever is using USDT. Bitcoin holders would suffer in the short term as speculators become cautious, but technically should not be affected other than a couple of albeit large crypto gateways potentially going under.

66% of all Tether (USDT) have been printed in the last 6 months

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