USDT stronger than expected? – From the day after the crash of theUST on Terra (LUNA) early May 2022 is the stablecoin USDT of Tether who has suffered bearish attacks. Despite these attempts at manipulation, the USDT is remained indexed on the US dollar. Its issuing company has recently explained why it considers that hedge funds (hedge funds) to the maneuver have no chance to achieve their end.
These Hedge Funds Are “Incredibly Misinformed” About Cryptos
The downward manipulation attempts prices ofUSDT have been so flagrantthat representatives of its issuing company, Tether, have publicly denounced them. Unfortunately for these hostile speculators, nothing went as they hoped.
In a blog post published on July 28, Tether explains why hedge funds lose money trying in vain to shortest (sell short) the USDT stablecoin. And yet, these speculators did not go with a dead hand. Over the past two months, Tether says it has honored $14 billion conversion from USDT to US currency, without failing.
The hedge funds rushed against the cryptosphere, and USDT in particular, after the disaster of the TerraUSD (UST) in May. They multiplied the short sales to drop as many cryptos as possible. These sales consist of taking a kind ofborrowing against an asset to sell it immediately, hoping then to be able to buy back cheaper after causing its decline, for repay the loan initial and pocket the difference.
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A Doomed USDT Demolition Business
But obviously for these speculators, destroying a stablecoin based on foreign exchange reserves as USDT is much more complicated than for a algorithmic stablecoin like Terra’s UST.
What makes Tether say that traditional finance has a hell of a “knowledge gap” of the crypto market compared to the regulars of this new asset class. Hedge funds that use the event around the UST to attack the USDT are “incredibly misinformed” and “completely in the wrong”.
Moreover, these short sales end up ruin them hedge funds. Indeed, they pay the equivalent of a borrowing rate USDT as long as their sell positions are open (and therefore the USDT is not repaid to lenders). However, it has now been more than two months that some wait that Tether’s stablecoin drops, with no result.
This “fundamental misunderstanding” of the crypto market and USDT will therefore have cost money to those who try to shortest the stablecoin. However, Tether must regularly fight rumors. Even very recently, the company thus had to refute rumors about his possession of Chinese commercial titlessupposed to support its stablecoin.
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