Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Tether (USDT)


The Mysterious USDK (USDK) Stablecoin

There is a mystery about the USDK (USDK) stablecoin. USDK was CoinMarketCap’s 514th ranked cryptocurrency on 1 June 2023.   Yet, I can

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Is BabyUSDT the future of Cryptocurrency?

To explain, the Baby USDT platform pays BabyUSDT token holders Tether (USDT) dividends. The plan is to pay 12% of every BabyUSDT transaction out in USDT to all BabyUSDT holders. Interestingly, BabyUSDT claims it will automatically send USDT to your digital wallet every 60 minutes.

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Why Tether (USDT) is the most valuable digital currency

I think Tether is popular because a USDT purchase is an investment in the world’s reserve currency. Tether is successful because it is one of the oldest and best known stablecoins.

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Some EOS Stablecoins

Therefore, scalability could speed the mass adoption of stablecoins. In particular, scalability could help big banks like BNY Mellon (NYSE: BK), JPMorgan Chase (NYSE: JPM) and Goldman Sachs (NYSE: GS) bring out their own stablecoins.

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Stablecoins as the Future of Cryptocurrency?

However, Stablecoins have a very odd characteristic. Interestingly, dollar-pegged stablecoins’ often trade for more than $1 on many cryptocurrency exchanges. 

For instance, Tether’s (USDT) Coin Price was $1.01 on 4 March 2019. Meanwhile, USD Coin’s (USDC) Coin Price was $1.02 on the same day according to CoinMarketCap. Moreover, BancorX gave CarbonUSD (USD) a Coin Price of $1.02 on March 4, 2019.

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Market Insanity

Five Myths about Stablecoins

“When an investor focuses on short-term investments; he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness.” – Nassim Nicholas Taleb.

Therefore stablecoins, like most cryptocurrencies are a purely speculative asset. Stablecoin speculators bet that these assets will work as advertised. If stablecoins fail the speculators will lose their money.
Thus, stablecoins are an inherently risky asset based on unproven technologies and business models. Thus only people who can afford to lose money should buy stablecoins.

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Is Tether (USDT) a Good Cryptocurrency?

Tether’s Coin Price raises serious questions about the whole concept of stablecoins. There is no direct conversion between Tether and the dollar.

Indeed, a person converting Tether (USDT) into greenbacks lost 1.22¢ on the transaction on 19 October 2018. That will convince many that conversion mechanisms like Uphold’s API are a better deal.

A logical conclusion is that the market prevents one-on-one conversion of Tether. To explain, Tether or exchanges have to buy dollars on the market for conversions. Hence, they have to pay the market rate for dollars.

Moreover, the exchange or Tether charged the market Coin Price for USDT. Under those circumstances, a one-on-one conversion of Tether is impossible.

Another conclusion we can make is that stablecoins are impossible. To explain, it is not possible to create a cryptocurrency with one-on-one conversion.

One-on-one conversion is impossible because Mr. Market controls the price. The only to change that is to keep altcoins off the market. That is impossible because anybody can sell cryptocurrency anytime.

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