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Comment by Animats | Hacker News Reader

Uh oh. Heavy withdrawals at USDT.[1]

Half a billion dollars pulled out today, all at once. Almost four billion in the last week. The market cap for USDT has dropped from US$84 billion to US$63 billion in the last month and a half.

Looks like we're going to find out soon what assets really back Tether.

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

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Maybe but after the 2018 bitcoin collapse Tether's market cap dropped ~40% without much effect.

Withdrawals are supposed to reduce market cap.

Until liquidity runs out.

Great, then you should cite evidence of declining liquidity if you want to support the thesis of Tether being about to blow up.

FWIW, I agree Tether is flaky and worth avoiding (to the point of having a short), I just cringe at attempts to cite market cap as a meaningful figure on its own.

That's because market cap is one of the few numbers that can be computed from the outside. If they issued audited financial statements quarterly, we'd know more. Yes, there is their rather vague backing report.[1]

[1] https://assets.ctfassets.net/vyse88cgwfbl/1np5dpcwuHrWJ4AgUg...

You can also look at how closely it maintains the peg, and whether it’s at a premium as much as it’s at a discount. (By which Tether does poorly.)

It’s misleading to look at the market cap with the implication that it’s fluctuations are due to loss of value per unit (the usual cause for non-stablecoins).

You might as well say that your bank lost $500 when you made a $500 withdrawal (while neglecting to mention the deletion of $500 in liabilities).