257
2.5K
2.1K
resolved Jan 1
Resolved
NO

We will count Tether as “de-pegged” if it spends at least one full day below 98 cents at any point during 2023.

This is question #36 in the Astral Codex Ten 2023 Prediction Contest. The contest rules and full list of questions are available here. Market will resolve according to Scott Alexander’s judgment, as given through future posts on Astral Codex Ten.

Get Ṁ1,000 play money

🏅 Top traders

#NameTotal profit
1Ṁ78,549
2Ṁ43,913
3Ṁ6,034
4Ṁ2,581
5Ṁ2,426
Sort by:
predicted NO

resolves no

predicted NO

This is a funny analysis of Tether red flags. I'm too dumb to understand it all, but it sounds plausible. Still I fear Tether will survive yet.

https://cryptadamus.substack.com/p/the-tetherers-apprentice?utm_source=profile&utm_medium=reader2

predicted YES

@uair01 omg this is excellent

predicted NO

Tether will peg and de-peg repeatedly its detractors

bought Ṁ100 of NO

Shouldn't this be declining over time, as the end of the year approaches?

predicted NO

@BenjaminIkuta limit orders at 11% and 12% require a lot of mana to break through

predicted YES

If anyone wants 15% on the ask. I'll do up to 100k

predicted NO

It’s a pretty easy choice whether they want to be billionaires legitimately or decabillionaires hunted by interpol. In this interest rate environment it’s easy to make money legitimately on demand deposits that pay no interest, and rational self interest would be sufficient to keep them from doing anything too crazy. The surplus could even be used to plug any holes in their balance sheet that might have existed.

Theta

predicted NO

@JonathanRay I was planning on absorbing those limit orders when I had the mana for it

bought Ṁ95 of YES

I mean it’s all par for the course, but I’m interested how little the price is moving on this, as tether experiences a fairly persistent depeg of 0.1-0.3 cents and is now having bigger spikes down to 0.987

I’ve been waiting for a catastrophic depeg since 2017 so I can well believe this thing can lumber on a bit longer

bought Ṁ0 of NO

@RobinBruce where are you seeing this?

predicted YES

@MarcusAbramovitch From a few days into august until shortly after I wrote this. Visible on coingecko’s history. At the time it was also occurring on Kraken’s USDT/USD market, so wasn’t just a BTC/USDT v BTC/USD mirage.

Returned to peg shortly after my post though, has weakened a bit in the last couple of days but not like in August

bought Ṁ100 of NO

@RobinBruce I'm happy to post a large limit order at 16% if you want to fill it

predicted YES

@MarcusAbramovitch Nah, plenty of ~10% available if I’m patient

bought Ṁ61,113 of NO

@RobinBruce With interest rates being this high tether would make huge profits on the float without even doing anything illegitimate

predicted YES

@JonathanRay How familiar are you with how treasury prices change with interest rates? like not “google it and give me the answer” but I don’t know if I’m talking to someone who’s worked ten years in a prop shop or someone who thinks of treasuries as a savings account with a fixed principal and an interest rate that floats - i’m happy to provide an answer pitched at the appropriate level

predicted NO

@RobinBruce if they put it in long term treasuries back when rates were low would get fucked by interest rates rising, but assuming they just borrow short-term for 0 by issuing tether and lend short-term for 5% they're making a huge risk free profit. I think most of their portfolio is commercial paper.

predicted YES

@JonathanRay The market cap of 83 billion (roughly equivalent to current market cap too) was reached when rates where in the range 0.25%-0.5% prior to the hikes. I personally wouldn’t consider it plausible that they rolled these into 5% yielding treasuries without loss of principal

predicted NO

@RobinBruce I mean they would have put it into low yielding commercial paper back then and now they can put it into much higher yielding commercial paper without increasing the risk, just because of interest rates rising

predicted NO

@JonathanRay Since tethers are effectively demand deposits that pay no interest, it would be dumb for them to have a weighted average maturity over 1 year imo. Probably most of their portfolio from the expansion has already matured and been rolled over into higher yields

predicted YES

@JonathanRay What you say is certainly rational and informed. However, I think if we’re getting into the territory where you’re presuming that Tether management have acted with professionalism, foresight and sound ethics, and then we’re really getting into the heart of where we differ.

predicted YES

98 cents according to which market data source?

predicted NO

@RobinBruce It depends on what Scott Alexander decides, which unfortunately is sometimes ambiguous for these markets. If you are interested in something more specific, my market /BoltonBailey/will-tether-depeg-even-slightly-in uses CoinMarketCap closing price data.