Tether, the algorithmic stablecoin that straddles all of crypto, released an attestation report for its second quarter this morning. As usual, it is a sham exercise. The report is a mishmash of meaningless statistics and assertions and does not provide much clarity about the stablecoin’s finances though it does bring to light some of the… Read More Notes 3/31: Tether Attestation Report, Stablecoins as Free Banking, and The Banality of Another DeFi Hack
The surge in market capitalization for Tether always brings the stablecoin’s many mysteries into the spotlight. Who runs it? Who are its bankers? And, most important of all, where are its reserves? Tether claims to be a fiat-backed stablecoin. This means that its circulating supply should be bolstered by an equal amount of fiat currency… Read More The Tether Algorithmic Stablecoin
Blame it on multiple open tabs. Or on a lizard brain. In the post on Tether’s reserves day before yesterday, I forgot to mention the most important risk facing the stablecoin: a debt default. Unlike past years, the prospect of a debt default by the US government is a very real threat this year. Both… Read More How Does A Debt Default Affect Stablecoins?
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… Read More Shorting Tether
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… Read More Where Does Tether Get Its Revenues?
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.… Read More The Tether Redemption Conundrum
CFTC Chairman Rostin Benham reiterated the case to bring “comprehensive market regulation” to cryptocurrencies and said existing rules are sufficient to rein in hijinks in its ecosystem in his Senate testimony. “We (can) eliminate contagion by applying the same principles of financial regulation that we apply to traditional financial assets,” he said. Benham’s views echo… Read More Notes 12/2: Benham’s Testimony, Tether Loans
One of the most interesting pieces of news to come out from FTX’s collapse in recent days is the exchange’s transfer of $250 million – one-fourth of its total revenue figure for last year – to an “unnamed related party” for “software royalties”. That party, according to the Wall Street Journal, is the primary shareholder… Read More FTX’s Mysterious Transfers and Tether
It was unthinkable some years ago. Fed Day – a day when the Federal Reserve Open Markets Committee (FOMC) meets – is fast becoming an important ritual in bitcoin’s calendar because it determines the cryptocurrency’s future price trajectory. Cryptocurrency markets are poised in anticipation of Fed Chairman Jerome Powell’s announcement his afternoon regarding interest rate… Read More Notes 9/21: FOMC and Bitcoin Price, Retail CBDCs, and Tether In Trouble Again
Bitfinex and Tether, already embroiled in a case with the New York Attorney General, were hit by a class-action lawsuit this morning. The suit was filed by Roche Freedman LLP, a law firm that successfully won a case against supposed Bitcoin creator Craig Wright recently. Their current lawsuit alleges that Bitfinex and Tether concocted a… Read More Class Action Lawsuit Filed Against Bitfinex and Tether for Fueling “Largest Bubble in Human History”
Tether is planning to launch a stablecoin pegged to offshore Chinese yuan. According to a Coindesk report, the new stablecoin was announced by Zhao Deng, Bitfinex shareholder and OTC trader, on China’s biggest messaging platform WeChat. He also told the publication that the stablecoin’s reserves would be held in Belgium. Deng stated that his peer-to-peer… Read More Tether Plans To Launch New Stablecoin Backed By Offshore Chinese Yuan
One of the biggest mysteries in crypto-universe relates to Tether’s bank balance. The cryptoasset has been in the eye of a storm regarding its backup reserves of the US dollar. But a new report by Bloomberg may be proof that the stablecoin may be adequately capitalized after all. “Bank statements reviewed by Bloomberg News suggest… Read More Stablecoin Tether May Have Adequate Backups Of US Dollar: Bloomberg
The price for Tether, the dollar-pegged stablecoin at Bitfinex, crashed over the weekend as investors fearful about its reserve deposits, sold the coin. The extent of damage to Tether’s price varied across various cryptocurrency exchanges from five percent to more than thirteen percent. According to some reports, Tether’s price dropped to $0.85 at Kraken, a… Read More Why Did Tether’s Price Crash Over The Weekend?
Even as a swirl of doubts engulf the utility of Tether, the numbers of stablecoins to prop up cryptocurrency markets has multiplied dramatically this year. The stablecoins list includes the likes of Basecoin, MakerDAO, and Havven, all of which have received funding from marquee names in the venture capital industry. The Winklevoss brothers, who are… Read More How Do Investors Profit From Stablecoins?