1. The people using it don't care if it is, as they may be trying to grift each other anyway, or be using it for short term holding, transferring between crypto accounts.

2. We would only see this on a massive sell off when Tether can't prop up the price fast enough with their reserves (by buying USDT with USD). This almost happened on May 11 of 2022.

3. The Madoff scam went years and years before finally being outed in 2008. Decades perhaps?

Tether is hard coded to bounce between their float. Tether made a mega fuck ton of money when that float widened and so did all the hft firms. Most of the tether is held by insiders and they can utilize that tether to obtain 100x leverage. You can literally see on chain when the yield widened back in may 11th, that sythetix and other leverage platforms got a huuuge influx of USDT and they used that USDT to purchase more USDT on the low… and guess what? Made a killing.

They are too powerful with too much money and too much centralized collusion to fail on their own. And the US policy still can’t define crypto, let alone police it properly. Only the full might of the US judicial system will make tether fail.

> We would only see this on a massive sell off when Tether can't prop up the price fast enough with their reserves (by buying USDT with USD). This almost happened on May 11 of 2022.

This did not almost happen. Do you enjoy writing fiction?

Madoff kept it going for 17 years.

If you pay low or no interest, a Ponzi can be kept going for a long time. Eventually, though, the end of growth plus ongoing withdrawals catch up.

I was short on Tether for years. Had to give up my position because “Markets can stay irrational longer than you can stay solvent."

What’s it usually cost to short a tether for a year?

At least it’s a non-productive asset so that’ll keep the cost down a bit, no?

That or you were just straight up wrong and bought into the fantasy that gets played out on HN every month.

Tether was taking other end of bitcoin shorts for 5 years. Its fantastically profitable and you bought the manufactured story that they are about to collapse any moment.

Indeed. Especially when the west in question is systemically important. How were you shorting?

I gave up my Chinese Market shorts for the same reason

A ponzi can keep going indefinitely if all the investors HODL without cashing out and no regulators check the books to trigger a run. As soon as enough people try to cash out their paper returns, the scheme unravels very quickly.

I agree, but we can't all cash out all of our money from US banks either. That much money simply does not exist. These comments have a lot more faith in FDIC than me, so maybe I'm missing something.

Maybe you have missed the US government's reputation of paying its debts and the FDIC's near 100 year history of paying out? It's hard to miss but I'm sure for some people it's possible.

Hey I was alive for the two times the US got within days of default for silly reasons.

Everyone has cashed out all of their money from US banks? Yes, I did miss that. Your insult is that FDIC has worked when this or that bank goes under before, and I never negated that.

It doesn't 'exist' now but it could be printed.

Yes. As much as desired can exist at any moment. When I say 'exist' I mean like 'exists with its current abilities via its value'.

Things which cannot go on forever, will stop.

Unfortunately, it is very difficult to know when.