Re:Tether price manipulation
by Uberphallus on Friday January 08, 2021 @09:06AM
(#25684828)
Since they can print X and they peg it to USD, it won't change in price itself, but nothing can assure the driving force of BTC price is actual demand.
[ Parent
| on HN ]
When central banks peg their currencies to others, that means they buy the foreign currency if their own currency is overvalued in comparison, or sell foreign currency to buy local curerncy in the case of undervaluation.
You say that a peg breaks if the Central Bank doesn't have the exchange reserves anymore to uphold a peg.
Where does Bitfinex take the money from to buy tether to prevent it from devaluing? Alternatively, who else buys tether, arbitrageurs?
You're missing the entire premise: where can I go sell my USDT directly for USD? Show me where.
Unlike your example where this an existing market that a peg has to be supported, there simply isn't a fungible USDT/USD market.
> You're missing the entire premise: where can I go sell my USDT directly for USD? Show me where.