RE: Tether: An accountant's view
interesting post, specially given your background. I am not sure why people use tether but could be because it may be cheaper to buy bitcoin on bitfinex, as opposed to coinbase. or its just that bitcoin can be 'cashed out' without money ever hitting the bank account, so I guess there is no question of taxes.
$2.5 bn does not sound like a lot given that this has been printed in 2015 and given crypto market cap. I have already read the post from bitfinexed at well in which he explains the whole controversy very well. it all does look dodgy and i dont know why would they not come clean with an audit. there was some controversy this year or last year, can't remember where one of the US govt agencies was investigating them and i think they came out clean. i don't think that bitfinex would be able to pull this off even till today given that the concern is already out there. and why are people still using tether? even after knowing that there could be a possibility of them losnig money.
Market Cap and actual hard currency are two different things. EOS raised $4bn from their year long ICO, Tether managed to "raise" $2.5bn with no real product.
I think a lot of people use USDT without ever thinking. If you're on a crypto only exchange and want to have some "cash", you hold it in USDT.
i get the difference between market cap and hard currency, but if want to cash out all 2.5 bn worth of tether to usd/gbp or any other fiat, i will still have to sell 2.5 billion worth of some crypto, lets say bitcoin, higher market cap means less coins. A higher market cap can absorb 2.5 bn worth of tether failure was my point, of which some is genuine, let's say half. Yeah, if news comes out that is tether is printing air backed tokens, then the market will sell off badly.
tether is a deposit receipt. its almost like a bank LC. "give this guy a bitcoin for tether, he has got cash, i can confirm it." I don't see any "stable" coin as a useful product.