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0 pointsdarawk8y ago0 comments

There are two types of divergences for Tether, and they each mean different things.

1. USDT > USD. This is the benign version. This signifies increased demand for Tether itself. This happens when there are arbitrage opportunities between exchanges that can only be exploited quickly using Tether. This is the variety that is most common, and exactly what Tether was intended to be used for.

2. USDT < USD. This is bad. This means that people are willing to take a small haircut to not be holding Tether. This means that the market views Tether as risky in some way, possibly implying insolvency. This has happened a few times, but is less common.

Understanding this is essential to interpreting Tether, price divergences, and also the nominal divergence between prices on different exchanges.

0 comments

thisisit8y ago

Where's the proof on your claim?

From the looks of the chart here(if you need more clarity zoom from April to date): https://coinmarketcap.com/currencies/tether/#charts

It is you second but is less common, USDT < USD is what is happening more. Sure there are some spikes in the opposite direction.

darawkOP8y ago

I'd say that that chart shows that when USDT < USD it is larger, but less frequent. Look more closely and I think you'll agree.

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