It concerns me that tether is buying Bitcoin (and plans to continue each month).
A stable coin that is pegged to usd should have 1:1 reserves of that pegged asset.
Of course BTC is the ultimate asset. But it's volatility can create an attack vector. Just like what happened with Luna.
They claim that they invested their USD on short term treasuries, and then put their profits in BTC. IF they are being honest, that should be fine, and is smart. If they are not being honest then it would blow up in a cycle or two anyway, because fraud doesn't work. No opinion on which is the case.
Perhaps that's true (only portion of profits). It does appear their majority of usd backing is us treasuries. Similar to the recent bank collapses, if a flood of redemptions occur, would they have to sell tbills at a loss to cover?
