If Tether Group (owned by Bitfinex) just kept one USD in the bank for each Tether they minted I would not be writing this idea. It was the whole idea of the thing in the first place.
They have been investigated because it's not entirely clear that they do, but no one has ever exposed them completely, so one USDT is still one USD. Till today.
I have always been happy to say I will never have any USDT in my portfolio. This is because from what they have announced, they do not have one USD backing each USDT. They have a portfolio of "low-risk" assets instead, which they say is worth more than one USD. We don't know what they own.
In my opinion, this means they are now like any other $2B hedge fund, with YOU as the investor. There is a difference though.
If their portfolio out-performs the USD, as a lot of hedge funds do (it's kind of basic, actually being able to make money from investing in stuff) they can keep the proceeds. After all, they only need enough USD to back the USDT in circulation, so if they are making money with their hedge fund trading, then they keep it. (You don't get any of it).
If their investments/trades go to hell in a handbasket then USDT goes down along with the NAV of their portfolio.
Today's price action makes me feel that this is not an attempt to smash USDT like LUNA. No, it is subtly different.
What did they invest in? We don't know. Was there any Crypto in their portfolio. We don't know but if so they have lost a lot of money... What about stocks? They look bad too.
When markets get this shaky, some hedge funds fail. Is this one going to fail?
They have been investigated because it's not entirely clear that they do, but no one has ever exposed them completely, so one USDT is still one USD. Till today.
I have always been happy to say I will never have any USDT in my portfolio. This is because from what they have announced, they do not have one USD backing each USDT. They have a portfolio of "low-risk" assets instead, which they say is worth more than one USD. We don't know what they own.
In my opinion, this means they are now like any other $2B hedge fund, with YOU as the investor. There is a difference though.
If their portfolio out-performs the USD, as a lot of hedge funds do (it's kind of basic, actually being able to make money from investing in stuff) they can keep the proceeds. After all, they only need enough USD to back the USDT in circulation, so if they are making money with their hedge fund trading, then they keep it. (You don't get any of it).
If their investments/trades go to hell in a handbasket then USDT goes down along with the NAV of their portfolio.
Today's price action makes me feel that this is not an attempt to smash USDT like LUNA. No, it is subtly different.
What did they invest in? We don't know. Was there any Crypto in their portfolio. We don't know but if so they have lost a lot of money... What about stocks? They look bad too.
When markets get this shaky, some hedge funds fail. Is this one going to fail?
Comment:
Sorry TYPO: it's a $82B hedge fund not $2B my bad
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