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RE: The MASSIVE Tether Ticking Time BOMB
Why have some cryptocurrency based on the dollar when you can just have the dollar? I agree. This is just fraud. But even if it isn't, there is no way it can ultimately exist long term, and while I understand people are using it as a cash exit during crazy market activity, it seems better to just actually go to cash.
It's used to avoid transaction fees associated with cashing out to fiat. Exchanges that use it like it because it keeps the money on the exchange as well.
Oh I certainly understand why exchanges like it. If you're a casino, you keep the customer inside the casino as long as possible, make the casino seem like it never ends, loops both inside and outside so the ways to spend and gamble your money are endless...and then you get Las Vegas.
The exchanges are financially motivated to keep the money inside the exchange. The customer / investor however needs to consider how governments will view this as (probably) a fraud off the bat, though it may be a decent enough idea; dollar-backed cryptocurrency. But as @cryptovestor has mentioned, the chance that Tether are actually holding that as cash is poor, or in some liquid asset close enough to cash to be considered liquid, and if some run happened on tether...you get the point. The risk isn't worth the reward here and we really just need better tools to be able to identify the most stable crypto even in a fall to move your asset base to (ether in this case it's been the last couple weeks), cash out to fiat, or just continue to hodl.