‘Chain Of Fools’ As Tether says it's performing a $1 billion swap with a third party as stablecoin falls as low as 95 cents
/By Stan Szymanski
One of these mornings
The chain is gonna break
But up until the day
I'm gonna take all I can take (From ‘Chain Of Fools’-Aretha Franklin)
After writing ‘A Modern Version Of A Run On The Banks Starts As Tether and TerraUSD Lose Their $1 Peg’ earlier today I thought I would relay this follow up story.
Tether operates on 8 different blockchains. It is swapping assets on two blockchains in two transactions. Tether has been the subject of not only speculation as it ‘broke the buck’ today and traded as low as $.94 but is also a subject of REDEMPTIONS.
In the article I wrote and published this morning, I quoted Forbes as reporting that…’Tether’s CTO Paolo Ardoino on Thursday said the group is honoring USDT redemptions at $1 and has managed more than 300 million in the last 24 hours “without a sweat drop.” That was very early in the day (Thurs. 5/12/22). How many more redemptions have flowed into Tether since then asking U.S. Dollars to flow out?
Is the swapping of blockchains being done to improve the liquidity of the coin so it can meet its redemption requests? How soon before their ‘right now’ liquidity is gone and they have to find buyers for at least some potentially ‘no bid’ securities’ (like Chinese Real Estate Commercial Paper)? Will this chain of events reveal that the emperor has no clothes when we find out the actual level of solvency (or lack thereof) in the commercial paper markets?
According to a late in the day Market Watch article…’"In few minutes Tether will coordinate with a 3rd party to perform a chain swap, converting from Tron TRC20 to Ethereum ERC20, for 1B USDt and from Tron TRC20 to Avalanche, for 20M USDt. The #tether total supply will not change during this process," said Tether on its verified Twitter account.’…
During the last 24 hours we see that Etherium has lost 20 percent of its value. Is it just a coincidence that Tether is swapping $1 Billion of Tron to Etherium? Did Etherium lose value because of Tether selling assets/crypto in order to meet redemption demands? What other unintended consequences will Tether meeting redemption requests have on other securities and the markets?
We will do our best to help keep you informed…
Chain, Chain, Chain-Chain Of Fools
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Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those fields for that type of advice.