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I imagine that bitfinex/tether is liquidating reserves to hold the peg. They can keep it pegged until they run out of money and then not only is tether worthless but so are all your coins on their exchange (and probably most other exchanges that use tether). That’s how bank runs work.

Lessons learned from sovereign debt crises: don't defend the peg. Let it float now, it will hurt more if you defend it all the way to insolvency. Devaluation is better than forced debt restructuring or full bankruptcy.

Oh well, we'll see it all again.

That reasoning doesn't matter for Bitfinex because when the money runs out they can just exit scam.

Maybe they already have. 850m is missing right?

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