With over half a million followers on Twitter, Peter Brandt is a well known career trader who often tweets valuable insights about the markets. In a recent tweet, Peter took a stance on Tether calling it a useless mind fart.
Choice Words From Iconic Trader Peter Brandt
According to Peter, the concept of converting a traditional fiat currency such as the dollar or the euro into a digital fiat unit such as Tether, just in order to protect its store of wealth against inflation, is a meaningless process as it serves no purpose.
Circular reasoning – TETHER
The idea that we convert one fiat currency unit (USD, EUR, et al) into another fiat currency unit (tether) so as to protect the store of wealth of the first fiat currency unit is nothing but a gigantic mind fart.
— Peter Brandt (@PeterLBrandt) August 16, 2021
Though there are many who agree with Peter’s tweet, a few have valid arguments against it. One user argues that stable crypto assets exist to allow people to take their local currency digital in a somewhat trustless way. The trust is at the issuer level instead of having to worry about that risk at every digital platform one might use.
Related Reading | Peter Brandt: 99% of Altcoins Will Be Forgotten in Five Years
Another Twitter user argues that no one really converts traditional fiat into stablecoin to protect their store of wealth, that Tether and other stables are just a nonvolatile bridge asset between trades of more volatile ones, without having to leave the crypto realm.
Meanwhile, Tether continues to dominate the crypto market as its leading stablecoin. Just yesterday the market cap of Tether has grown to $64B marking a new milestone and another indication of the market’s continued trust and confidence in Tether.
Tether Announces Further Details Into Its Reserves
On August 9, Tether Holdings Limited, the issuer of the largest stablecoin USDT has released a new attestation report that covers useful insight on the composition of its reserves in a bid of be more transparent.
Ever since March when the company released its first attestation report vaguely revealing assets and liabilities, investors have been patiently waiting for a second report. In the latest attestation report, Tether has not only included the composition of its reserves, but also given a breakdown of the ratings and maturity of its commercial paper holdings along with the certificates of deposit.
Related Reading | Brandt: You’re Doing it Wrong if You Accumulate Dollars Over Bitcoin
As on June 30, 2021, the company holds $30.8B in CP and CDs which is about 49% of its reserves. Around 93% of this is rated A-2 and above and 1.5% iis rated below A-3. Among other reserves, the company holds around $6.28B in cash and bank deposits, $1B in reverse repo notes and $15.28B in U.S Treasury bills.
Featured image from iStockPhoto, Charts from TradingView.com