Do they? Genuine question. How much does bitfinex support the price at $1 on exchanges?

I’m not sure if they do, but if there was sell pressure they would have to or peg would break. Possible there is not sufficient sell pressure at moment.

When you sell USDT for USD on exchange, someone is providing that dollar. If no private market participant willing, then peg slips. You would expect fiat withdrawals in downturns and peg slippage absent support.

>How much does bitfinex support the price at $1 on exchanges?

An open question. Several attorneys general have ongoing investigations regarding the tether peg.

A really grim and cynical person might make the case that exchanges want something like tether to exist, and are incentivized to fudge the public-facing numbers regarding tether trade volume and its order book.

I think what you're saying here is that if there was a run on tether, bitfinex might stop supporting it. And sure, I think that's probably true. But I'm asking how much of a role do they play in actively supporting it day to day. Are they the principle buyer of the currency when people want to liquidate? Or is it other people?

If you asked Bernie Madoff on December 10th 2008 how well his investment fund was doing, he would say "Excellent, thank you."

The set of people who have inside information on how tether functions and the set of people who would actually tell the truth about it are entirely disjoint.

Ask the Bank of England about their desire to maintain Breton Woods

Kraken.com smelled the bad fish years ago. They made tether a normal exchange rate. If there is a "rush out of the door". The value would just drop :)

Theoretically, what is stopping BitFinex from supporting the peg predominately on BitFinex and letting arbitrage traders take care of the rest?