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Tether Buying Bitcoin Math (Patreon)

Published:
2023-05-23 15:35:55
Imported:
2023-05

Content

  • Tether, the world's largest stablecoin issuer, announced on May 17 that it will regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin.
  • This means that Bitcoin could indirectly benefit from the high interest rate regime currently deepening Tether's pockets.
  • Some have made analogies between Tether and LUNA, but the two projects are incomparable. Prior to LUNA's collapse, UST was backed by nothing. Tether, on the other hand, intends to use profits to build out reserves, and a vast majority of Tether's backing is held in T-Bills, Money Market Funds, and the repo market.
  • By assuming constant profits in Tether (~4% yield on $83bn) and varying BTC prices, we can estimate approximately how much BTC Tether will be able to buy on a daily basis. At the current price, Tether will be able to buy 51 BTC a day, or 5.6% of the daily 900 BTC subsidies paid to miners. If prices fall to $22,000, Tether can buy 6.9% of the daily issuance. After the halving (~April 2, 2024), the daily issuance of BTC will be cut in half, which could lead to even more demand for BTC from Tether.

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Comments

Anonymous

Nice! 👍

Anonymous

To da moon 🌝 to da moon 🌝

Anonymous

I like how they say “up to 15%”. Means they could buy .000005% and why would they buy btc not much % moves. Doesn’t make much business sense considering what they are doing is making them serious BANK already. (Why buy an asset that is so volatile?) My gut tells me this news was from a payout(corrupt whale) trying to trick retail. Notice how they use the verbage “up to” gives them an easy way to peddle backwards. Anyone else think this or can we trust tether? Are they even a US company??? Thought it was hong kong or something. Dunno about ya’ll but after Luna, celsius, voyager, ftx…. How can you even trust any company in crypto? I’m bullish but not on this news for said reasons above, what you think James? I mean respect btw so thanks for sharing this is just my thoughts

Anonymous
>>109140192

Think you're missing the whole point due to your admitted PTSD. Whatever they buy is good for us. Period.

Anonymous

Irony that we think T bills and Money market are backup

Anonymous
>>109140192

I do appreciate everyones viewpoint, was kinda weird how we pumped 1% on the news when it came out then 15 min later we dumped 1%. Wonder why the market doesn’t view it as bullish news something just feels off. Also remember, did they say when they plan to sell the bitcoin? When do they dump on retail and take profit, don’t think they plan on holding indefinitely. Yes PTSD is good protects me from past events of crypto market corruption ;)

Anonymous

All corporations should backup their balance sheet with bitcoin as their store of value

Anonymous
>>109140606

That was my thoughts. But when comparing to the entire basket of assets, it's probably true.

Anonymous

Love the math. Cannot understand it though. For experts. Nonetheless, dumping will make it cheaper... we wait. Things are not as rosy as it seems. And I am no expert.

Anonymous

What are the pitfalls not considered similar to what was not considered with Luna.

Anonymous

“The math on this looks great!” - Do Kwon and the Luna Foundation

Anonymous

Yeah, Twitter is not the greatest source of news, it's the greatest source of FUD and panic. This is actually giga bullish, Twitter initially freaked out because they dont read or think...the echo chamber moves quickly. I am glad we are all on the same page now. I hate how the angry panic sets in before cooler minds prevail on Twitter, but at least me made it!!! BOOOOLLLIISSSHHH AF!!!!!!! The Crypto Comminity really needs to fact check and deep dive before they absolutely freak out, it's literally non stop, rarely is it anywhere near as bad as they think.

Anonymous

For me it's bullish overall!

Anonymous

Ah, Tether. Not out of bed yet.

Anonymous
>>109144171

Not really the same as Luna scenario as they are buying with their profits and diversifying their holdings. Luna was buying as part of their stablecoin holding to make up their peg

Anonymous

The year 2029: The Bloc Report It is now widely being reported that the popular and ubiquitous stablecoin Tether has been largely controlled by large powerful private organizations that are indirectly controlled by the largest banking cartels with deep government connection 😉🤔🫣😅