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Comment by Ologn | Hacker News Reader

> HN posters have successfully predicted 9 out of the last 0 Tether blow ups.

People predicting stock market declines have thus far been predicting something which declines and then eventually bounces back.

This will not happen to Tether - when it blows up, like Mt. Gox, or a host of other crypto scams have - it will not be coming back.

As someone else here said, markets can remain irrational longer than you or I can remain solvent. Bernie Madoff's Ponzi scheme collapsed in 2008 not due to Harry Markopolos talking to the SEC in 2000 (or after) - it collapsed because everyone started withdrawing their money at once, and then the whole house of cards collapsed.

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It collapsed because everyone started withdrawing their money at once, and then the whole house of cards collapsed.

That may be happening to Tether now. Take a look at Tether's market cap chart.[1] Click on Overview->Market cap-> 1 month. You can see the cashouts. Between 5:09 AM and 5:14 AM on May 27, 2022, the market cap of USDT suddenly dropped by $750 million dollars. There have been five huge cashouts like that since May 13th. About 12% of Tether has been cashed out in the last 3 weeks.

This never happened to Tether before. Until now, market cap was "line goes up". Biggest previous drop in market cap was about 1% in mid-2021.

So, how long can Tether pay out 4% of its market cap per week? Looks like we're going to find out.

[1] https://coinmarketcap.com/currencies/tether/

The Tether MC has been leveling off. (See the 1M view of MC on CoinMarketcap -> https://coinmarketcap.com/currencies/tether/)

While Tether may be technically insolvent there looks like there would need to be another $40 Billion in redemptions to really test the peg based on the latest attestation. (They had $82B MC & now have a $72B MC. Cash Equiv. - Comm. Paper & COD = $50B back in March).

My guess is they may have weathered the storm for now. Probably need a few more weeks to fully confirm, but high price today was .9995. If redemptions fully stop or MC goes back up slightly then peg probably returns.

It's only been four days since the last dump, and there was a 3-day weekend in there. Too soon to say it's over.

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