I’m convinced that in its early years, Tether operated as a scam, skimming deposits and creating coins out of thin air. But once they realized they had accidentally created a money-printing machine, they attempted to become legit and quietly buried the evidence of their past.
scrubs · 1h ago
Yah crypto has an ocd obsession with cash, usd, and actually valuable stuff like gov backed bonds. If crypto thought for a femto second they couldn't get the above crypto would self dissolve in 10 mins. These are the ends, the only ends that matter. The rest is means ... a side show.
pinkmuffinere · 3h ago
Maybe the post is correct, but it offers nearly no context or evidence for its claim. As a reader, if I already knew enough to validate that this article was worth trusting, I wouldn’t need the article. On the other hand, I am interested in the premise, but don’t know enough to tell if the article is true, and the article has no sources/evidence to back up its claim. I don’t think there is any situation in which such an article is useful, except as an “echo-chamber” kind of piece
AvAn12 · 3h ago
$13b on $113b =12%. With treasuries that is only possible with massive leverage, negative convexity, or other reindeer games. I doubt the prospectus will tell much. Good luck to everyone involved but I personally am envisioning a ten foot pole and all that.
oarla · 2h ago
13B it’s not entirely from treasuries. The breakdown is
7B from treasuries —> probably from the methods you described
5B from Gold —> believable if you notice how gold has done in 2024
1B from other sources. No idea what they are.
The article mentions that tether may not have been audited by a third party. So I’m not sure how believable these numbers are.
attogram · 3h ago
Does USDC make profit in same range as USDT?
pjjpo · 9m ago
Circle is the company managing USDC and is the one to watch for a similar number. They just IPO'd and will probably have more precise data in the next earnings report, but for IPO it seems they reported 2024 $1.5B revenue mostly from interest. I couldn't find holding percentages but as a founder of the token, we can assume much lies on Coinbase - they give a pretty good yield so any coins there will have fairly low interest income for Circle, and their revenue would be mostly coins moved off of Coinbase.
OutOfHere · 1h ago
Rationally it is silly to hold too much of a depreciating asset like a USD backed stablecoin because it loses value to inflation, also because it earns no interest. The value is in holding it briefly, exchanging it for appreciating risk assets, e.g. PAXG, BTC, XMR, ETH, etc. as soon as one is comfortable with the transition.
nikanj · 3h ago
What happens if enough people want to exchange USDT for actual USD? Tether goes down the same way SVB went down: Unable to offload long-term government bonds for full dollar value
OutOfHere · 1h ago
It won't go down. It will merely break its dollar peg, dipping in value temporarily until the bonds mature, at which time it would restore its peg. Most people would be wise enough to not sell it at a dipped value if an independent audit report can confirm the Treasury backing.
Spivak · 26m ago
I mean you're not wrong. Tether is effectively operating as a weird kind of bank and is susceptible to the same failure modes if people go on a bank run. You just don't get to run to the FDIC if it happens.
USDT does have some nice properties compared to a bank account like being able to mint accounts at will, no deposit or transfer limits, no KYC, faster settlement than wire transfers, can send internationally with little fanfare. I'm sure there's someone who is pumped about this but I'm not sure if the market is large enough to support the size they've grown to.
daveguy · 3h ago
Does anyone trust these sketchy crypto ghouls to do right without serious regulation?
The article mentions that tether may not have been audited by a third party. So I’m not sure how believable these numbers are.
USDT does have some nice properties compared to a bank account like being able to mint accounts at will, no deposit or transfer limits, no KYC, faster settlement than wire transfers, can send internationally with little fanfare. I'm sure there's someone who is pumped about this but I'm not sure if the market is large enough to support the size they've grown to.