from Hacker News

Short Sellers Bet Tether, Crypto’s Central Bank, Is Vulnerable to a Run

by lreeves on 4/3/22, 2:21 PM with 4 comments

• by tannerbrockwell on 4/3/22, 5:37 PM

  Betting against tether is not only betting against the long term growth of crypto currencies increasing in value, it is betting that regulatory overhang will drag the value of tether down from its supposed dollar peg.

  We can and should imagine a bank holiday is possible where you cannot spend or withdraw from a bank. This is the possible scenario with Tether, the tether token contract can be locked for any address, this includes exchanges. An asset that is illiquid, may function as a line item in a ledger, and if it cannot be traded or moved the market will vanish. The chaos this would cause would be devastating.

• by jqpabc123 on 4/3/22, 3:01 PM

  How is it supposed to fall?

  The biggest crypto exchange with the largest trading volume works to keep the price fixed. If they need more funds to do so, they just mint more Tethers. Basically, they own this game.

  Betting against them is like betting that Disney will run out of animation --- only worse because Tethers are easier to create.