> Tether, the world’s largest stablecoin, has seen its circulating supply plunge from a record $84.2 billion on May 11 to around $73.3 billion as of Monday, according to data from CoinGecko. About $1 billion was withdrawn late Friday evening.
At first blush this looks bad. That's about 12% of Tether's market cap.
On the other hand, the exchange rate is at this moment is 0.999:1. So the drawdown did not "break the bank." This means that Tether had at least that much capital that it could cough up in the space of less than 30 days.
This may seem like a good thing for bulls because Tether is demonstrating resilience under stress.
Or it can be viewed as a bad thing for bulls because it means that Tether is getter closer to the limit of its (widely-ridiculed) reserve claims.
Given that Tether has every incentive to cheat and has demonstrated sleazy behavior, it's safe to assume they're cheating.
The question is not whether or not they're cheating, it's how much.
It will be very interesting indeed if Tether manages to keep its peg given another 10, 20, or 50% drawdown.
This essay [1], discussed on HN a few days ago, claims to have made some predictions about Tether worth preserving for posterity. Conspicuously absent from those predictions was the market capitalization at which Tether falls days-on-end below 90% of its 1:1 dollar peg.
For those who claim to know exactly what's happening behind the scenes at Tether, I think that's a prediction worth making.
At first blush this looks bad. That's about 12% of Tether's market cap.
On the other hand, the exchange rate is at this moment is 0.999:1. So the drawdown did not "break the bank." This means that Tether had at least that much capital that it could cough up in the space of less than 30 days.
This may seem like a good thing for bulls because Tether is demonstrating resilience under stress.
Or it can be viewed as a bad thing for bulls because it means that Tether is getter closer to the limit of its (widely-ridiculed) reserve claims.
Given that Tether has every incentive to cheat and has demonstrated sleazy behavior, it's safe to assume they're cheating.
The question is not whether or not they're cheating, it's how much.
It will be very interesting indeed if Tether manages to keep its peg given another 10, 20, or 50% drawdown.
This essay [1], discussed on HN a few days ago, claims to have made some predictions about Tether worth preserving for posterity. Conspicuously absent from those predictions was the market capitalization at which Tether falls days-on-end below 90% of its 1:1 dollar peg.
For those who claim to know exactly what's happening behind the scenes at Tether, I think that's a prediction worth making.
[1] https://www.kalzumeus.com/2022/05/20/tether-required-recapit...