BTW, to connect some dots here -- a lot of the people seeking access to a coin like USDT *aren't* doing so via creation. They're often doing so via just sorta buying it in the markets -- and they're buying a LOT, and REALLY aggressively.
The premium with which USDT trades to $1 is pretty volatile as a result -- as I type this, the average BTC/USDT market (as compared to BTC/USD) is trading about 15bp lower, implying USDT = $1.0015 or so. And that's all from people AGGRESSIVELY selling BTC vs. USDT to get USDT.
And note, *these* are the best markets to use to determine where USDT is trading -- the combo of BTC/USDT and BTC/USD markets, e.g., are WAY more liquid than any exchange's USDT/USD market, so the prices from these (even though it's a two-leg trade) matter way more.
(They're trying to get it for the reasons noted in the article, as well as maybe some other idiosyncratic ones pending market conditions -- distrust in local currency/banks, collateral, access to the super liquid USDT markets chief among them.)
Man, USDT fell back to $1 (in the BTC/USDT markets) as I was typing those previous tweets :P It really does trade a ton, and not especially efficiently on a second-to-second timescale.
Other stablecoins like USDC don't have anywhere near as volatile premia -- that's because the creation/redemption process is more involved for USDT, and fewer firms can actually do it. This is why, as I noted above, many who want it are going to markets and not creating.
And when USDT gets above $1? A sophisticated firm like Alameda with great setups on all the exchanges and bots to execute more than one leg at a time is gonna want to sell! And we do -- a LOT.
That's, for instance, a big part of the reason the price came back in line while I was writing this tweet :P when it diverges from $1 we can pretty safely put on big bets because, well, we *do* have the necessary setup to do large creations and redemptions when we want to.
And, as we've been noting recently on Twitter, we do these! A lot! And this is win-win -- obviously we're making money to it because we can, e.g., be selling above where we create, but we're also bringing the price in line so that when aggro buyers come in, it sticks close to $1.
Having done so much of this and worked so closely with their team is why we trust USDT much more than the rest of crypto twitter seems to at times :P Having done big creations when USDT > 1 and big redemptions when it's < 1 will do that -- and that's been a powerful tool.
The rest of the world is missing out on something for being so distrustful of USDT, I think -- but if no one else wants to collect this premium consistently, I guess we'll have to suck it up.

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More from @AlamedaTrabucco

3 Jan
Alright, the apes have it! Let's discuss the mythical "alt season" which people seem to get obsessed about every time BTC moves by itself.

I call it "mythical" BTW not because it's never happened -- but because, as I see it, there's no *real* reason to expect it to happen now.
Alright, that started a little inflammatory, so let me clarify. When I hear people talk about "alt season," it tends to mean like, a period when alts rally a ton, especially vs. BTC, and it doesn't really matter what a coin is -- they all just go up.
The reasons I think this is not guaranteed start with BTC, so let's take a look at what's happened with BTC lately. And that is quite a lot! In the past week or so, BTC has continued its mega-rally that started around Thanksgiving with all the news of U.S. institutional buy-in.
Read 27 tweets
24 Dec 20
'Twas the night before Christmas, and try though they may
Not a token was mooning, not even AAVE
Market buys getting sent by the apes without care
In hopes that new all-time highs soon would be there
Our traders were summoned post-haste from their beds
While visions of making bank danced in their heads
SBF in his sweatshirt, and I in my tee
Had just downed something we're gonna label "coffee"
And amongst all the chaos, amongst disarray
Amongst the red numbers borne out of the fray
From all of the carnage arose one big loser
A coin with a regulatory accuser
Read 19 tweets
18 Dec 20
Many close calls later, BTC finally managed to break through $20k -- and it BLEW through it, barely slowing down til $22k. What was different this time?

A thread about man vs. machine.

As has been pointed out, I've been adamant that the rallies in the past month or so have been heavily fueled by rampant liquidations on both BitMEX and Binance. And they have! But they were also fueled by organic buying among U.S. investors, as has been a popular narrative.
If anything, the narratives surrounding various U.S. funds and other companies buying BTC have gotten *stronger* in the past week or two than they were around Thanksgiving. More and more funds have announced their crypto holdings or plans to acquire them.
Read 31 tweets
12 Dec 20
Yeah, among other problems with this analysis, it also just TOTALLY ignores the main reason that a company like Alameda (which does trades from all of these buckets all day every day) might have for trading net in one direction in a day on one market:
... and that reason is: it's out of line with some other market(s)! For instance, let's just take today: I just checked, and it looks like in the 12 hours I've been trading today, Alameda has net bought 100 BTC or so on the OKEx BTC/USDT market.
Why is this? Well, during this time, we were also fairly flat BTC deltas (as we quite often are), so the reason *surely* was not, as this report might have you claim, that we were net buying BTC today!
Read 13 tweets
30 Nov 20
I do wish I had something more "different" to say than: buying kept up into liquidations which dried up around 19900, people sold and the new levered longs got liquidated down to here. But that's pretty much the whole story so far today! Image
It is worth noting that if you noticed the liquidations dried up -- which was pretty possible -- selling was a great trade, because of how much of the pop was due SOLELY to those liquidations. There were a LOT, organic buying did not explain TOO much of this rally.
(At least from 19300 or so on to 19900, anyway -- there was plenty of organic buying before that, but by 19300 it was mostly liquidations.)
Read 6 tweets
26 Nov 20
What happened on Thanksgiving 2020?

(Alameda edition -- a thread about maximizing)

I'm sure it's no surprise that the threads I post here are "delayed" a bit -- the sorts of insights I'm sharing tend to be about what *happened*, but at Alameda we're trying to figure out what is *about to* happen. How did we do that today?
This tweet *sort of* describes Alameda's game plan headed into the day. We thought it was probably more likely to keep going down just based on Thanksgiving = no U.S. people to buy again -- but mostly? We expected momentum.

Read 26 tweets

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