Hey guys,
Something is seriously wrong here. How can Tether have more trading volume than it's circulating supply?? It is so liquid it is being exchanged at almost nonstop.
It defies even basic economics--the demand is exceeding supply yet somehow the price remains constant.
I have not followed tether before but if you'r familiar with it please help explain to us what's going on. This is concerning.
https://www.coindesk.com/big-fail-tether-might-still-cryptos-ticking-time-bomb/
Cheers,
Non-Greedy Crypto Investor (@dandida)
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There is nothing wrong with USDT traded volume being higher than the circulating supply. Actually, most of the USDT isn't even moved, because it just stays on the exchanges and is being used to exchange for other cryptos.
E.g., if there you do a couple of trades just buying and selling 1 BTC against USDT, then every time you buy or sell you increase the USDT traded volume by 1 BTC worth in USDT, so ~9000 USDT.
Because USDT is used as a transfer currency, it's not unlikely that its churn (an indicator for how often it gets traded) is very high.
got it. my complete question is if tether is possibly a fake/shit coin how/why is it trading so much? richard commented below that it's being used to hedge the market drop. i'm afraid that one day tether will implode and the effect will spill over into the market
Tether is more like USD in crypto world. Most traders in the crypto currency market have noticed that tether is not a coin to invest in but rather a coin that could be used as a back up when the market is in its dip. By dip I mean when most coins are losing their value. This is because tether price never falls below $0.9 and also not above $1.2 or 1.5
As a trader if I have BTC in my wallet and the price of BTC is dropping (remember price is the purchase power), I will only do myself good by saving my BTC in tether (i.e. buying USDT) which have only slight change in price. when the price is at its deepest price (from your experience as a trader you should know this), you buy BTC again; now you will be getting more BTC coin because you bought at a cheap rate and when the price (purchasing power) grows back to normal you can use it to continue your trading.
In other words USDT is a backup coin in the market and also used when supposed to pulse in trading to save and also get even more gain.
I hope this helps? If you have any more or want to add to this (anyone at all) please do we are all here to learn and earn.
If this helps you answer your question or improve your trading skill please follow and up-vote my posts. This is a way of showing appreciation.
Thanks RichardGerald
got it! this is the answer i'm looking for.
it makes sense to use USDT as a hedge and to park your earnings to buy low. but why not park it into USD instead of USDT? it seems like it would serve the same purpose. if you're concerned that the market will go down then sell off your btc for fiat USD, then buy back at the dip. is there a reason why USDT is favored over USD?
thanks. followed.
nice post, you got upvoted and followed..
thanks. concerned about tether screwing up the market
The Tether fud is real but a bit over exaggerated
yea with all the fake stuff going on in crypto we have the right to be concern with these things
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Thank you very much @dandida for this information
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