Tether CTO Paolo Ardoino responded to the June 27 report: The Wall Street Journal The hedge fund makes a short bet on Tether’s Stablecoin USDT through Genesis Global Trading of cryptocurrencies.
In this article, Leon Marshall, Head of Institutional Investor Sales at Genesis Global, cites a commentary on how traditional hedge funds are trying to short Tether USDT. Marshall said,
“The interest from traditional hedge funds that are considering tethers and trying to short them is actually skyrocketing.”
Tether reaction
Paolo Ardoino, Tether’s CTO, visited Twitter a few hours later and argued over the hedge fund’s strategy and why it shorted USDT. Ardoino explanation A tool used in traditional finance to short the world’s largest stablecoin by market capitalization.
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Tools: USDt / USD perps (perfect attack vector that offers asymmetric bets), spot selling, DeFi pool imbalance, …
Goal: Put enough pressure on billions of dollars, causing a large outflow and damaging the liquidity of tether, eventually buying back tokens at a much lower price.— Paolo Ardoino (@paoloardoino) June 27, 2022
He further argued that hedge funds believed in the claim that Tether was a home of cards built on fictitious assets and lies, and that they were partially responsible. He also proved that “competitors were spreading through a coordinated troll network,” damaging Tether’s credibility and ruining its reputation. In Tether’s defense, Ardoino said:
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But, as we always say, Tether actually had / had more than 100% backing, never failed to redeem, and all USDt will be redeemed for $ 1.
Tether processed the 7B redemption in 48 hours. This is an average of 10% of total assets, which is almost impossible for banks.— Paolo Ardoino (@paoloardoino) June 27, 2022
Following the bank run after Terra’s collapse, Tether’s liquidity is unmatched. 2007, British Bank Northern rock The property was executed at only 5% and became state-owned with government bailouts.
Tether has absorbed a great deal of pressure in a short period of time without any obvious problems, as about $ 16 billion, or about 20% of its market capitalization, has been withdrawn from Tether over the past month and no redemptions have been publicly reported.
The WSJ noted that Tether’s market capitalization has fallen by $ 16 billion to $ 67 billion, but has not commented on whether it affected Tether’s reserves.
Tether liquidity test
Ardoino also emphasized the actions of other financial institutions and their investment in projects such as TerraUSD.
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And during the last two months, while FUD was focusing on tether #crypto It was discovered that devastation, many lenders and hedge funds were considered holy heroes in our industry, actually risking Tether not even touching a 10-foot pole.— Paolo Ardoino (@paoloardoino) June 27, 2022
Take a look at Genesis Global
Genesis Global is a brokerage firm that handles transactions for professional investors. Marshall said,
“Short trades are almost monopolized by traditional hedge funds in the United States and Europe, but cryptocurrency companies, especially those based in Asia, are willing to promote the other side of the transaction. “
The name of the hedge fund betting on tether is unknown at this time.
Genesis Global Active loan As of the first quarter of 2022, 48% of its assets were held in US dollars or stablecoin. Interest in shorting the tether was also mentioned in the report.
“Shorting an asset designed to be capitalized on parity does not seem to require any further options, but derivatives desks trade short tethers through options as well as OTC forwards. He showed great interest in doing. “
