Tether starting to lose its peg
Tether is currently sitting at $.94 and falling.
Over the past year or so, Tether has come under tremendous scrutiny surrounding its use as a stable coin on many of the largest cryptocurrency exchanges.
Many of these exchanges do not have fiat on/off ramps, so Tether picked up the slack and has been used as a way for investors to hide out during bear markets or to transfer money from exchange to exchange.
That second use case is especially important on exchanges that are crypto only.
Some brief history:
Much of the rally of 2017 has been claimed to have been caused by manipulation tactics primarily involving tether.
The biggest one being, tethers possibly used to support bitcoin prices any time they appeared ready to crash.
Then, even more questions started to arise when tether and bitfinex announced that they were having trouble securing banking partners after their original banking partner parted ways.
This was also right around the time their auditor decided to dissolve their relationship with tether and bitfinex.
Eventually tether was able to secure a new banking partner and also provide account snapshots taken by an independent law firm claiming that tether was indeed backed by the dollars it claimed to be.
A move which partly put some fears to rest.
Fears are popping up again...
Just recently, rumors started swirling that tether and bitfinex are again facing troubles with their banking partner.
More about it can be found here:
https://www.ccn.com/tether-imploding-as-it-falls-4-an-important-step-toward-crypto-market-growth/
However, this time it appears to actually be affecting the tether market prices.
Over the past few days tether has broken its dollar peg to the downside and mostly remained there.
Early this morning, tether dipped as far down as $.92 and is currently trading around $.94.
While other USD stable coins like GUSD, PAX, and TUSD are all experiencing large inflows. Pushing them to trade at premiums to $1.
TUSD was trading around $1.08 at last check.
(Source: https://bitcoinmagazine.com/articles/warning-signs-timeline-tether-and-bitfinex-events/)
Overall, this is likely very good news.
Tether has been shrouded in controversy for some time now and there is simply not enough transparency in a project like it that has that much affect on the entire crypto market.
Having tether lose its stranglehold on the stable coin market would be good news as money moves to other more transparent and regulated products.
Something that would help bring more confidence to investors and traders participating in the markets.
Which as we all know, confidence is something that tends to rule most investing market places.
So, while tether's demise may be looming, I for one think it would be a good thing for the entire crypto ecosystem if that were to be the case.
Stay informed my friends.
Image Source:
https://bitcoinist.com/250-million-tether-grant-here-we-go-again/
Follow me: @jrcornel
I have always told people to be very careful not to HOLD Tether as it is a centralized crypto product not a true cryptocurrency itself. This is the exact scenario I was warning against.
Even tether said on their page that they do not guarantee that you will be able to exchange 1 tether for 1 usd.Ain't that enough to not hold that shit?Many people will lost lot of money when it goes down.
we need to make sure that projects like tether are shown to be good or bad. If it is said that they are shrouded in contraversy then maybe people should not invest. Most likely it will end up like bitconnect
Yep, the more transparency the better.
I just hope it does not end up losing peoples life savings like what bitconnect did. That was heartbreaking to watch videos on youtube that lost everything
Don’t tether you future to Tether 🧐🧐🧐
Very punny corndog!
Yeah bear markets always expose the fraud, this is a good thing @jrcornel
There is a lot of truth to that. Getting the tether situation cleaned up would certainly help bring more institutions into the market.
Yep, I think Bitconnect might have gone on a lot longer if the bull market kept going.
True.
To listen to the audio version of this article click on the play image.
Brought to you by @tts. If you find it useful please consider upvoting this reply.
Good news for Steem then ?? Thanks for this insightful post @jrcornel
Not sure it affects steem too much directly. However, if money is flowing out of tether and into bitcoin, that may raise prices of all cryptos priced in terms of bitcoin, which would help steem.
While there may be some systematic effects of a Tether collapse, the more transparency in the market the better off we will all be in the long run.
Correct. So far it actually looks pretty good. Money is flowing out of tether and into other cryptos and stable coins. Works for me.
I suppose in the short term Tether imploding could be troublesome for the market. Agree with you in the long run, though.
Posted using Partiko Android
Actually in the short term it would probably boost crypto prices. In most cases, in order to sell tether, you must buy bitcoin or ether or another crypto.
This post was upvoted by @steemybot, Send at least 0.01 STEEM or SBD and get an upvote. Join my discord server for free weighted upvoting for each post, just put the command !upvote before the web address of the post and you will get a free upvote within 2 mins.
@steemybot our mission is to support high quality posts which will raise the value of the STEEM Blockchain.
I don't trust stable coins, or the SBD
The difference between SBD and Tether is, that SBD is completely transparent and in this regard more predictable and honest. It would be cool if people would be using SBD instead of Tether, but at the moment SBD lacks a mechanism to peg it down to $1 if it goes above $1 on exchanges. This was a deliberate choice to not peg SBD when it is above $1.
They traditionally haven't been very good at doing their job have they?
For now i only trust usd on Bitshares dex.
just use true usd or sbd they are audited so you can't be scammed like with tether
Correct, but SBD hasn't done a very good job of being a stable coin. It has traded above $1 more often than at $1 over the past year.