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Crypto Veterans Praise USDT Highly Amid Market Drama, Why?

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Fri, 11/11/2022 - 11:09
Crypto Veterans Praise USDT Highly Amid Market Drama, Why?
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As all mainstream cryptocurrencies were bleeding in the last few days, many crypto users decided to increase the share of stablecoins in their portfolios. As such, the FTX/Alameda collapse amplified all of the flaws of this very important segment of Web3.

Tether (USDT) exceeded Vitalik's expectations

For many crypto holders, U.S. Dollar Tether (USDT), the largest stablecoin by market capitalization, was a "safe haven." Users started aggressively buying USDT on centralized and decentralized exchanges. Ethereum (ETH) co-founder Vitalik Buterin appreciated the way Tether (USDT) has gone through recent cataclysms.

He admitted that USDT's transparency leaves something to be desired, but the coin and its issuer "exceeded" the expectations of the profound decentralization advocate.

It should be added that on Nov. 10, 2022, amid the market bloodbath, Tether (USDT) representatives released their periodic attestation.

As highlighted by Paolo Ardoino, CTO of Tether and Bitfinex, Tether Limited increased its share of cash and its equivalents to a historical high of 82%.

Think twice before "shorting" Tether

Another Ethereum (ETH) veteran, Mikko Ohtamaa, CEO and co-founder of Trading Strategy and former LocalBitcoins CTO, admitted that it would take a massive amount of money to put Tether (USDT) in an FTX-style liquidity crunch.

He stressed that in 2022, there are no markets in which whales can short USDT to make its issuer collapse. A well-balanced portfolio of reserves makes the entire system sustainable.

Regarding this pesky issue of transparency of Tether (USDT), its resources and operations, Mr. Ohtamaa highlighted that it increases over time:

Lying is becoming increasingly hard.

However, Tether (USDT) is still vulnerable when it comes to hypothetical regulatory attacks ("police shutdown") or potential deals between Wall Street investment banks.

"USDT is preferred by the market": Bitcoin OG Brad Mills

Bitcoiner and crypto educator Brad Mills agrees with Ethereans: Tether (USDT) looks so sustainable for him that its prolonged de-pegging from the USD price is next to impossible.

Tether (USDT) can de-peg only briefly, being targeted by coordinated attacks. As covered by U.Today yesterday, on Nov. 10, 2022, an Alameda-tied address allegedly started to "short" Tether (USDT) through Curve and Aave pools.

Related
USDT, USDD, FRAX, Who Else? Stablecoins Under Fire Amid Market Uncertainty

However, USDT promtly recovered to its "normal" $1 level. By contrast, algorythmic stablecoins FRAX, MIM and, in particular, Tron's USDD witnessed more remarkable damage, as well as low-cap Euro-pegged stablecoin Eurocoin (EUROC).

Mr. Mills appreciate the proactive work by Tether Limited and the Q4, 2022, structure of their rebalanced portfolio of reserves:

Through this extreme contagion in both macro & crypto markets, Tether has been ahead of the curve, reducing their commercial paper & increasing their US Bonds.

As such, Tether's (USDT) operations during the ongoing market insanity are recognized by opposing groups of Web3 actors.

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