
Tether (USDT) price falling to $0.95 - telotortium
https://coinmarketcap.com/currencies/tether/#charts
======
jpatokal
I built this site in February this year in anticipation:

[http://www.untether.space/](http://www.untether.space/)

The spread between Bitcoin priced in Tether and Bitcoin priced in USD has been
holding steady at <1% until now, but as I type this, the risk premium is at
8.4% and climbing. Looks like the Untethering has begun.

For the curious, source at
[https://github.com/jpatokal/untether](https://github.com/jpatokal/untether)
and also submitted as a Show HN at
[https://news.ycombinator.com/item?id=18219034](https://news.ycombinator.com/item?id=18219034).

~~~
zamadatix
$2,000,000,000+ worth issued without proof of backing? What value did Tether
add that people were willing to deal with it as a middleman to dollars?

Side note: The graph could use some TLC. The colors are indistinguishable and
there are no static historical charts on the page, just the graph since my
visit.

~~~
bmh
A major use of USDT is that you can sell your cryptos when they're high,
converting them to USDT, which holds it's value. Then, when the crypto prices
drop, you buy in again, and repeat. By keeping it entirely in the crypto
space, your country's tax system can't charge you for capital gains.

~~~
JumpCrisscross
> _By keeping it entirely in the crypto space, your country 's tax system
> can't charge you for capital gains_

This is blatant, willful and permanently-documented tax evasion, an amusing
combination of illegality and stupidity.

~~~
teilo
No, it’s not. It means you don’t pay capital gains when you’re merely
exchanging one form of crypto for another. You have not realized any gains
until you have converted your crypto into real assets. Converting from one
form of crypto to another for the purposes of arbitrage only delays the taxes.
It never eliminates them.

This is really no different than selling and buying stocks in an IRA account.

~~~
jungturk
Crypto-crypto trades no longer enjoy the like-kind exchange tax treatment
you're describing (in the US, as of 12/31/2017). The recent tax law narrowed
that benefit to real estate only.

[https://www.coindesk.com/owe-irs-crypto-crypto-
trades/](https://www.coindesk.com/owe-irs-crypto-crypto-trades/)

~~~
JumpCrisscross
> _no longer_

On 31 December 2017, the IRS clarified that § 1031 does not apply to crypt-
crypto trades. It did not say § 1031 applied to crypto-crypto trades before
then.

The article you reference says "traders still _may_ be able to argue that
their transactions undertaken in 2017 and prior years were not taxable under
the Section 1031 like-kind exchange rules," but that "the application of the
like-kind exchange rules to crypto transactions is far from certain" [1,
emphasis mine].

[1] [https://www.coindesk.com/owe-irs-crypto-crypto-
trades/](https://www.coindesk.com/owe-irs-crypto-crypto-trades/)

------
andrewla
A note on the price reported by coinmarketcap -- that is a price derived from
computing the average traded price of USDT across all exchanges, including
ones that have no path to converting directly to USD.

What this means is that this dramatically overstates the price of tether. If
you navigate to "market" [1] and change the "Pair" dropdown to "USD" you'll
see the three exchanges that actually offer the pair. Bitfinex is the sponsor
of Tether, so will always say $1; but currently they are apparently having
banking problems.

Kraken and Bittrex offer independent markets so are a better fair reflection
of the price, in the sense of "if you have tether, and want foldin' money
right now, this is the current discount". Kraken has somewhat limited
withdrawal capabilities at the moment as well, so their price also reflects a
premium for the latency.

[1]
[https://coinmarketcap.com/currencies/tether/#markets](https://coinmarketcap.com/currencies/tether/#markets)

------
apo
It could have something to do with the arrival (soon to be a flood) of much-
better financed and regulated stable coins such as the Gemini dollar:

 _To date, there has been no trusted and regulated digital representation of
the U.S. dollar that moves in an open, decentralized manner like
cryptocurrencies. Enter the Gemini dollar — a stable value coin (often called
a “stablecoin”) that is (i) issued by Gemini, a New York trust company, (ii)
strictly pegged 1:1 to the U.S. dollar, and (iii) built on the Ethereum
network according to the ERC20 standard for tokens. ..._

[https://medium.com/gemini/gemini-launches-the-gemini-
dollar-...](https://medium.com/gemini/gemini-launches-the-gemini-
dollar-62787f963fb4)

~~~
JumpCrisscross
> _regulated stable coins such as the Gemini dollar_

I still don't see how they satisfy their anti-money laundering requirements.

You can't have a token which is (a) anonymously traded, (b) freely redeemable
for hard currency, _and_ (c) compliant. Even if you modify (b) to "redeemable
with approved KYC paperwork for hard currency," you still have the problem
that you sold a token for cash to one person, redeemed it for cash to another
person, and have no clue what happened in the middle.

One could completely remove (b), _i.e._ have a non-redeemable currency. But
now you're closer to the precedent set by Liberty Reserve [1], in that the
people who most want anonymous electronic dollars over real electronic dollars
_are people laundering money_.

[1] [https://www.nytimes.com/2013/05/29/nyregion/liberty-
reserve-...](https://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-
operators-accused-of-money-laundering.html)

~~~
A2017U1
> anonymously traded

Where exactly does anyone claim that?

They have a team of lawyers and access to all the regulators by virtue of
being such a huge exchange. Do you honestly believe they haven't consulted
widely on this?

~~~
joshstrange
> They have a team of lawyers and access to all the regulators by virtue of
> being such a huge exchange. Do you honestly believe they haven't consulted
> widely on this?

I'll get back to you in a few days when I finish laughing... MtGox was also a
huge exchange, I think the only sane thing to do at this point with Cryptos
are to assume all exchanges are stupid, aren't solvent, haven't consulted
lawyers, and/or don't know the law until it is proven otherwise. Exchanges
that don't fit the criteria are the exception not the rule.

~~~
A2017U1
The sheer ignorance surrounding cryptomarkets is quite staggering. I'm first
to call a good part of it a sham but simply writing off everyone is naive, low
effort discourse.

Gemini is owned by the billionaire Winklevoss twins, its based in and
regulated by NY, the most notoriously heavy handed cryptocurrency jurisdiction
on Earth. Many exchanges won't even do business with customers from NY.

Think it's fair to say that they're not "stupid"

------
zekevermillion
There's a wave of full-reserve stablecoins with more careful regulatory
strategies in the pipes. For example, Sila. * If you need programmable money,
and also want access to US mainstream, then I think this is increasingly going
to be where you go.

* [https://medium.com/@blog_53353/announcing-sila-building-the-...](https://medium.com/@blog_53353/announcing-sila-building-the-new-financial-world-78d818faac14)

~~~
nosuchthing
[https://coinmarketcap.com/currencies/trueusd/](https://coinmarketcap.com/currencies/trueusd/)

If it’s true that tether is fraudulently printing tethers, then Bitfinex has
already pulled one of the largest heists in history.

An important case law regarding these types of digital cash operators would be
liberty reserve.

[https://www.nytimes.com/2013/05/29/nyregion/liberty-
reserve-...](https://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-
operators-accused-of-money-laundering.html)

------
soVeryTired
Cryptocurrency investors discover _breaking the buck_ [0]. I wonder what
painful lesson they'll have to relearn next?

[0] [https://www.investopedia.com/terms/b/breaking-the-
buck.asp](https://www.investopedia.com/terms/b/breaking-the-buck.asp)

------
lewisflude
Isn't this an easy opportunity for arbitrage? Assuming it goes back up to $1.
I thought that was the whole point of fiat-backed crypto?

~~~
nwellnhof
The fact the Tether who issued USDT for presumably something around $1 aren't
buying it back themselves for an easy profit should tell you something.

~~~
mtgx
It doesn't tell you anything. Maybe they think the bitcoin price is going to
shoot up 3xin the coming months so using their money to buy tether would be
pretty stupid in that case no?

This is actually why it's so hard to tell from this whether or not this is
something bad or just "normal" because tether price always reaches lower
levels like this when people get out of it to buy cryptocurrencies, too.

~~~
michaelt

      Maybe they think the bitcoin price is going to shoot up
      3xin the coming months so using their money to buy tether
      would be pretty stupid in that case no?
    

For Tether to be backed by US$, for every 1 USDT they need to hold $1 in cash
or cash equivalents.

If they have invested the fiat in bitcoins, they aren't backed by US$ any
more.

~~~
caf
This is right - Tether buying back their USDT means that they get to retire 1
USDT for 0.95c of their backing reserves, turning the remaining 0.05c into
profit which they can then invest wherever they want.

------
hendzen
reposting my comment on this issue from 8 months ago:
[https://news.ycombinator.com/item?id=16182423#16183604](https://news.ycombinator.com/item?id=16182423#16183604)

------
hal9000xp
As tensions with USDT rise, my prediction is that MakerDAO decentralized
stablecoin will take over the market in 2019. You can see how issued DAI
market cap pumping up steadily all year long almost with no break:

[https://mkr.tools/](https://mkr.tools/)

So I'm accumulating position in MKR.

Here is YC interview with backer of MakerDAO:

[https://blog.ycombinator.com/blockchain-investing-with-
olaf-...](https://blog.ycombinator.com/blockchain-investing-with-olaf-carlson-
wee-and-aaron-harris/)

Andressen Horrowitz also increasing their position in MKR:

[https://medium.com/makerdao/a16z-crypto-purchases-6-of-
mkr-b...](https://medium.com/makerdao/a16z-crypto-purchases-6-of-mkr-backing-
stablecoin-vanguard-makerdao-ff410a692393)

[https://medium.com/makerdao/maker-sells-12m-of-mkr-to-
partne...](https://medium.com/makerdao/maker-sells-12m-of-mkr-to-partners-led-
by-andreessen-horowitz-and-polychain-capital-68b2b26548)

Although there are some concerns that it's economically impossible to create
fully decentralized stablecoin. Historical example:

[https://en.wikipedia.org/wiki/Black_Wednesday](https://en.wikipedia.org/wiki/Black_Wednesday)

Failed stablecoin example:

[https://coinmarketcap.com/currencies/nubits/](https://coinmarketcap.com/currencies/nubits/)

We will see as time goes on. Anyway, it's very interesting economic
experiment.

P.S. So YC HN readers keep downvoting me even if I give links to interview on
YC. Okay...

------
eberkund
Except that Tether price often fluctuates and it has gone lower than $0.95
before, it is already on its way back up since this link was posted. As
another commenter mentioned the coinmarketcap.com price is based on the
average price of trades at various exchange, if there is a lot of sell
pressure it will naturally temporarily fluctuate lower.

Don't get me wrong, I think Tether is up to something fishy but I don't think
that they have billions of dollars less in assets than the number of Tether
issued.

------
crunchiebones
This also caused the price of bitcoin to go up
[https://www.forbes.com/sites/billybambrough/2018/10/15/bitco...](https://www.forbes.com/sites/billybambrough/2018/10/15/bitcoin-
has-leapt-sharply-higher-heres-why/amp/)

~~~
nosuchthing
That’s not the true USD exchange rate, the “price” goes up on exchanges with
USDT (tether) meanwhile any exchange with access to actual normal USD banking
withdrawals have an abnormally lower spot price. If this activity persists, it
would indicate the devaluation of tether which accounts for the vast majority
of trade volume across the major exchanges.

Also note, the article you linked to is not Forbes but just a random blogger
using the public Forbes blogging api.

------
yholio
There doesn't seem to be any particular new development, just a string of
unsubstantiated rumors and hoaxes: [https://blokt.com/news/too-much-fud-
bitcoin-pumps-tether-dum...](https://blokt.com/news/too-much-fud-bitcoin-
pumps-tether-dumps-on-fake-news-bitfinex-temporary-withdrawal-pause)

That's not to say that Tether does not have major credibility issues and
dubious liquidity, just that no new publicly available information would
justify the movement. On the other hand, when a bank run is in progress, it's
irrelevant if it was started by a rumor because the rumor becomes a self
fulfilling truth, especially in the face of shaky financials.

~~~
empath75
> That's not to say that Tether does not have major credibility issues and
> dubious liquidity, just that no new publicly available information would
> justify the movement.

When a jenga tower topples over, it's not usually because someone played
especially badly, but because almost any touch at all would make it fall.

------
anonu
This is a huge buying opportunity!

------
Tsubasachan
I always found it amusing bitcoin needs to be backed by USD. Wasn't the whole
BTC religion about how bad and unstable traditional currencies are? Meanwhile
no central bank is trying to save Tether.

~~~
deckar01
It's not about backing with value, it's about liquidity. Traders want to use
USD assets on a market and be able to transfer them as a digital asset between
exchanges with minimal 3rd party fees. Transferring USD through a bank account
can be expensive.

~~~
JumpCrisscross
> _Transferring USD through a bank account can be expensive_

I keep hearing this, yet can instantly and for no charge electronically
transfer under $10,000 between various accounts, and with minimal (often
waived) wire charges, much larger quantities more reliably (and with less
risk) than using a "stable coin".

~~~
deckar01
In my experience, wiring fiat USD from a non-US exchange to a a US bank
account is slow (days) and has hidden fees (my bank, their bank, and someone
in between).

