Shorting Tether is a good risk-reward play. Can't lose much since Tether won't go 10x or anything, but as in the case of what happened with UST, it can go down over 99% You'll need leverage to get the proper payout to make it worth it Your cost is only the funding fee for the short position Where are you shorting Tether, Pekelo?
OK, some technical questions: 1. Where would this be the safest to do? I assume a US based, regulated exchange? 2. What exactly is the cost of doing that for a year? What is funding fee? 3. Let's say I am right and want to cover it at 20 cents when all the crypto world is melting down as a result of Tether blown up. What are the chances I can actually transfer my money out of the exchange? In a related topic, I see FTT is still trading. So let's say I shorted FTT at $20 and want to cover it now. I guess as long as I had my short position not on FTX, it can be covered on other exchange. Is that correct? Googling the original problem, I have found this: How to short Tether So the easiest way to do so would be to use the DeFi protocol AAVE. Simply supply another stablecoin like DAI or USDC and borrow USDT. Then swap USDT for DAI or USDC and wait. Drawbacks Easy, right? Well, there are some drawbacks you should be aware of. Borrowing USDT comes at a cost. Those DeFi protocols pay their suppliers at your interest rate. Usually, the interest rate of USDT is higher than that of other stablecoins. This means you will have to pay more interest on USDT than you earn by supplying, let’s say, DAI.
https://www.coindesk.com/markets/20...ers-short-tether-after-usts-implosion-report/ 1. You borrow USDT in size, say 1 million USDT from one of the crypto assets lenders, i.e. Genesis, BlockFi, Voyager, Nexo, Ledn. Those entities are going bankrupt. You'll need to provide collateral, i.e. 800,000 US $, a lien on your multi-million $ home, pledge your $1M worth of Tesla through your broker, etc You take the 1M USDT from your Metamask wallet and send to your Coinbase account and sell for $1M and wire to your BofA checking account minus all the fees. Then you wait for Tether to go to 10 US cents, so you can buy 1M USDT from Coinbase and send back to your lender from #1 and get your collateral back 2. You keep paying your loan from #1 at idk, maybe 10-15% APR depending on your 850 credit score and Pekelo ET reputation, maybe get it down to less than 2 year FFR 3. Answered above, if cryptos and Tether are blowing up, it's going to be very cheap for you to acquire 1M USDT to your Metamask wallet that you can send back to #1. If your crypto lender is bankrupt, as long as you did not provide $ as collateral, you can sue them to get your collateral back, i.e. remove the lien on your house, idk, ianal ---------- Shorting FTT or any crypto asset like SOL, BTC, ETH payout is in USDT so a different process than shorting USDT, you can watch youtube videos on ByBit That's more for crypto believers and holders, though. For example, I used a perp futures platform to short FTT and they accept a multi-asset (cryptos) as collateral against the short position, you can have a combination of stablecoins, btc, eth, and other cryptos with a certain $ value as collateral and their liquidation engine will do the necessary calculations in real-time As long your you don't fall under the threshold value, you' can hold the short as long as you want, funding rate is 11.17% variable APR (I just checked my account) ------ Defi shorting USDT through AAVE is the best as far as least counterparty risk, you buy 120,000 USDC from Kraken, send to your Metamask wallet, deposit to AAVE, borrow 100,000 USDT, that will go to your Metamask wallet, send the 100,000 USDT to Coinbase sell for 100,000 US $, wire to your Robinhood account And do the reverse when USDT is 1 cent, but USDC is still $1