No it’s stable because they’re lying about what it is backed by. It’s easy to make a scam look superficially stable if you are not called on it or make it impossible to call you on your promises.

They have 66bn, of actual money that people paid for tether, in circulation. It won't be that easy to bring it down.

Also the question is, do people really want to call them on their promises. That's another thing noone would benefit from.

It's exceedingly unlikely that Tether has anything close to 66B of "real money" backing it.

The most likely theory at this point is that most of it is FTX-style IOUs from other crypto companies marked at absurd pre -crypto winter valuations, which will collapse like a house of cards the instant they are touched or even exposed to light.

> They have 66bn, of actual money that people paid for tether, in circulation.

what's your source for that? Tether itself admitted that isn't true: https://cointelegraph.com/news/tether-to-reduce-secured-loan...

That's very interesting. I wasn't aware of that. I guess in the crypto winter there's very little need for new tether so they found another way to make money. Risks are obvious, that the borrower defaults and collateral drops so they won't be able to recover full amount of tether. Risks and rewards in the form of the cost of the loan.

They announced they are curbing this activity so maybe it brought them more loss than gain?

They still probably didn't leak mucj tether this way. But I now see that it's not that 66 bln of dollars changed hands, but most of it in crypto valued at bull market prices. So if people wanted to cash out into dollars they would probably collapse. But why would people want to cash out into dollars en masse and pay tax on that?

And if they want to cash out into crypto there's no problem becuse the crypto is cheap now so tether doesn't need to give away much for each USDT they redeem.

> But why would people want to cash out into dollars en masse and pay tax on that?

Because they think Tether will collapse. It will happen slowly, then all at once.

Why not buy another crypto instead?

>>why would people want to cash out into dollars en masse and pay tax on that?

Because they see it as a likely loss, and would rather get some return than nothing. A taxable gain is always better than a loss.

Even if the gains were in other crypto and are now being cashed out via Tether to $USD, it's better to realize those gains in $USD and pay 0%, 15%, or 20% capital gains taxes (depending on your income bracket), rather than lose it all due to Tether becoming worthless. Manageable but certain cost vs unpredictable likely total loss.

Ah, so you are saying that it is such a mess that no one can/will take either side of the 'bet', so forces that would ordinarily more quickly push it off it's pseudo-equilibrium are absent?

Yes I agree that those forces are minimal for Tether (and crypto in general) vs other investments. But it seems at most like a minor second- or third-order effect; technically existing but not practically moving (or stabilizing) the markets.