12 points | by petethomas 7 hours ago
10 comments
It blows my mind one can buy _ton_s of gold.
What is the point of stablecoin holder to hold gold?
digital currency cannot be trusted on its own?
If you read the article, it's because Tether also issues a gold token called XAUT whose value is pegged to the price of gold:
https://coinmarketcap.com/currencies/tether-gold/
Their whole market cap only equates to ~14 tons at current prices though… and article says they bought 26 tons in the quarter before this quarter where they bought 27 tons…
Step 1, people hand Tether real money at 0% interest.
Step 2, Tether invests in interest bearing assets.
Step 3, Repeat step 2 with profits from step 2.
The choice of gold is just diversification. Kind of odd timing though.
That’s pretty stupid. If the value drips, it’s no longer sufficient collateral.
It's collateral for their XAUt token, not the dollar one.
From the article:
"The reserves backing Tether USDT were dominated by the U.S. Treasuries with gold representing only 7% as of the end-September."
Head, we win. Tails, you lose.
Does anybody remember Long Term Capital Management? https://en.wikipedia.org/wiki/Long-Term_Capital_Management They also thought nothing can ever go wrong. Until it did... Dunning-Kruger effect.
It blows my mind one can buy _ton_s of gold.
What is the point of stablecoin holder to hold gold?
digital currency cannot be trusted on its own?
If you read the article, it's because Tether also issues a gold token called XAUT whose value is pegged to the price of gold:
https://coinmarketcap.com/currencies/tether-gold/
Their whole market cap only equates to ~14 tons at current prices though… and article says they bought 26 tons in the quarter before this quarter where they bought 27 tons…
Step 1, people hand Tether real money at 0% interest.
Step 2, Tether invests in interest bearing assets.
Step 3, Repeat step 2 with profits from step 2.
The choice of gold is just diversification. Kind of odd timing though.
That’s pretty stupid. If the value drips, it’s no longer sufficient collateral.
It's collateral for their XAUt token, not the dollar one.
From the article:
"The reserves backing Tether USDT were dominated by the U.S. Treasuries with gold representing only 7% as of the end-September."
Head, we win. Tails, you lose.
Does anybody remember Long Term Capital Management? https://en.wikipedia.org/wiki/Long-Term_Capital_Management They also thought nothing can ever go wrong. Until it did... Dunning-Kruger effect.