Tether: What part of this balance sheet do we not believe?

Discussion in 'Crypto Assets' started by GlobalMacro90, Aug 1, 2023.

  1. So Tether released their Q2 attestation (I know I know not an audit) and honestly its pretty insane (if to be believed)

    - Making 1BB per QUARTER in profits! (really insane considering only a handful of people work there). Is this the most profitable company per employee ever?
    - 3.3BB in EXCESS reserves aka reserves in excess of the value of their coins outstanding.
    - Buying Bitcoin is huge size. Now with over 1.6BB worth and they said they are going to buy more. They just started doing this recently and are already at nearly 2BB

    Just incredible amount of money being made, and 3.3BB in excess reserves is enormous...

    So what here do we not believe? Totally serious question.

    Their bills, MMKT funds and repo are through Bank of NY as I understand, so I very very much doubt they wouldn't have those assets. I don't think bank of NY is keen on joining this Ponzi if it is one.

    Bitcoin also they wouldn't be able to fudge, since you would be able to see this balance on chain.

    "other investments" of 2.3BB? What exactly are those?
    "secured loans" of 5.5BB? Secured by what? (I am guessing crypto)

    Even if you give those two shady categories a 50% haircut tho .... Tether is STILL backed ~100%.

    So what here do we now believe? What are they lying about? This all cant be fake bc again there are counterparties (bank of NY, etc) that aren't just going to lie for Tether.

    Tether truthers what say you? Any other thoughts here other than the Bloomberg commercial paper (which they dont own anymore) article from 2017?

    Disclosure: I own and will own no Tether.
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  3. Baron

    Baron ET Founder

    So many people have been calling for a Tether implosion for years, and it just never happens. The amount of scrutiny Tether has received has been incredible, so it might be the right time for the naysayers to finally throw in the towel on this topic.
  4. Also this makes tether one of the largest holders of treasury bills in the world which is pretty mind blowing. They just passed the UAE!
  5. Enough said, and I am just quoting your words.
    Who would trust that? Imagine any other proper company on the Nasdaq, for example, saying:
    "we have 7.8 BB in investments that we are not going to audit".

    It would make the news immediately.
    Nobert and rb7 like this.
  6. johnarb


    You have been psyoped by literally everyone into believing that the best version of the US $ is something you will never own any of

    I bet you will own the FedNow CBDC and be happy you can transfer money to France without any privacy whatsoever
    Baron likes this.
  7. NoahA


    The timing is incredibly good for them right now. The banking collapse back in the spring was brought about because banks were holding too many bonds only yielding 0.25% and hence, if sold vs. held to maturity, would take a massive haircut. And the banks had to sell since they had so many withdrawls. I would bet Tether was in the same position, but they didn't experience the 50% outflows and needing to come up with cash. Now, any new treasuries accumulated in the past year are paying massively, and since tether doesn't pay dividends, they get to keep it all.

    I bet you the banks are jealous. They also want to keep all the cash and earn interest, but not have to pay out depositors anything, and also not be worried about any withdrawls. Tether has the banks beat in this business model. Tether collects the cash and invests it. Doesn't need to pay any profit sharing, and doesn't worry about hardly any withdrawls.

    Furthermore, if Tether survived bitcoin dropping to 16k and kept averaging in, they are also doing well. I don't think they were buying bitcoin when it was up at 60k, so they are probably doing much better than other people since the timing for their accumulation worked out better.

    Because now that the wind is at their sails, and they survived the worst part of the storm, there will be no opportunity to see who is "swimming naked". Heck, the FED may even now be on their side since they are a large holder of USTs.

    The only thing I would worry about is their ability to control individual addresses if told to by governments. But I wouldn't worry at this point about a collapse. As @johnarb points out, the need for Tether is massive around the world and only going up.

    That's my analysis.
    johnarb and Baron like this.
  8. Fair enough... but like I said even if you take a 50% haircut on those assets (which seems extreme) Tether is still 100% solvent.
  9. Easy bro. I just use USDC when I need a stable bc I'm in the US and I trust them more. I recognize the huge need for Tether around the world, I just personally dont need to use it
    #10     Aug 1, 2023