Shorting Tether

One of the reasons to invest in stablecoins is their de-pegging event. When stablecoins trade below their intended peg of 1:1 with a fiat currency, short traders can turn around and exchange them for the promised parity. In that respect, stablecoins are like money market funds. Over the years, Tether, the world’s biggest stablecoin by market capitalization, has lost its peg numerous times and traded … Continue reading Shorting Tether

Where Does Tether Get Its Revenues?

Where does Tether get its revenues? Over the years, the stablecoin claims to have made redemptions worth billions of dollars. At the same time, it has made investments and loans worth millions of dollars to crypto ventures on the side. It has 42 employees, per LinkedIn.   Where does it get the cash to manage these business activities? The company’s financials are a black box. … Continue reading Where Does Tether Get Its Revenues?

The Tether Redemption Conundrum

In the early days of the United States, private banks were allowed to issue money on the condition that it was backed by gold. This meant that customers could redeem their specie and notes for gold, which was considered a stable medium of exchange in an economy rife with fraudsters and hucksters issuing fake money. But a high redemption rate could eat into a bank’s … Continue reading The Tether Redemption Conundrum