Ok, interesting thread, but I cannot let this inaccuracy stand — under most rules “six of clubs high” is not a possible poker hand.https://twitter.com/Bitfinexed/status/1479569011348316163 …
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“Stable coin” is a red herring, it has a limit order book like any other coin and an arbitrage mechanic to redeem to USD, that arbitrage mechanic turns into an asset recovery process instead and the limit order book will reflect implied recovery
An easy way for Tether to trade to 0.8 is if it turns out it’s backed by a bunch of loans, a bunch of the loans default, and the average recovery rate is 80%
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The flip side If assets are worth .8 is they’re worth 1.2. There’s a world in which they made savvy directional bets on bitcoin on the March lows and are over collateralized in which case they could do an airdrop if people were sufficiently short
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Omg, imagine the chaos of a bunch of BTC/USDT perps being liquidated not because BTC falls but because USDT gaps up to $1.2
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How would a .8 Tether affect the broader ecosystem? Genuinely curious.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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I get what you both are saying but I think it assumes status quo continues after news breaks. Bid volume will plummet. Other exchanges will delist for supposed “regulatory” reasons or some bs but fundamentally because they hate that Bitfinex dominates that market
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Yeah it would definitely be chaotic and there would almost certainly be no bid on some exchanges for a while. Would also be a rush to redeem USDT for USD by paying the 0.1% redemption fee, so I fully expect that Tether would gate redemptions in that scenario.
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