March 28, 2024

Diary of a Madman. Part twentieth. Bitcoin – Tether – US bonds.

an investigation has now begun against the stablecoin Theter for providing false information andorganizing a Bitcoin pump, at the moment it iscould lead to problems for Tether, and Tether currently has $28.85 billion in US bonds, so according to Theter rules, as the value of Bitcoin decreases, Tether must reduce its share of US bonds. Tether US bond to capital ratio is 43.5%. a decrease in Bitcoin by 10% will lead to the sale of 4.35% of their bond or $126 million (I made a mistake, I incorrectly calculated 4.35%, we must count the total capital as $66.5 billion, so $290 million and the relationship is linear). These calculations are very approximate; I wanted to show that changes in the Bitcoin exchange rate affect the US bond rate and, ultimately, the dollar exchange rate. There are other stablecoins, but the operation scheme is the same as Tether, most of its assets are in US bonds, which means the influence of Bitcoin on bonds is even higher. Yes, at the same time, Tether has assets worth $66.5 billion, and in trading Tether provides approximately the same amount of USDT, and the accounting report says that there is no bubble in Tether (the available capital is approximately equal to all USDT in circulation). There is a simple, very light effect on US bonds and the dollar exchange rate.

Reporting for 06/30/2022 by Tether on the state of capital.
Diary of a Madman. Part twenty. Bitcoin - Tether - US bonds.

Maybe I'm wrong. something I got confused in the layouts. I'm leaving this post here so I don't have to look it up later.