Why would you hold USDT instead of USDC?
For trading some markets? Sure.
Maybe occasional higher yield on lending?
But there's no point being a stablecoin maxi: neither USDT nor USDC pass down the yield to holders.
No equity exposure to Tether either.
You get 100% of the risk but no upside (only temporary escape from crypto volatility).
There's also no need for CT to get defensive on S&P's latest downgrade risk for USDT to 'weak'.
That was my first though.
On the second thought, Tether is buying BTC (5.5% of backing) that helps pump its price.
Kinda based? Circle just holds US treasuries and cash-equivalent assets.
But we've got Strategy for pure BTC proxy-trade. And Strategy pumps when BTC does well, why USDT has no upside...
Oh, but Tether also buys gold for their backing. Now at 7%... Ok... Why not buy more BTC instead of gold? Are their bearish on BTC?
Anyway, 10.5% of the backing is a salad of loans to 3rd-party non-affiliated entities like crypto trading firms, mining operations, etc.*
I get flashbacks to 2021 when Tether lent $1b USDT to Celsius (backed by BTC) as part of "secured loans" category in their reserves.
At that time loans like this were 8% to 10% of USDT reserves.
Now, ~23% of USDT's backing are volatile assets (what S&P calls high-risk assets). Up from 17% a year ago.
Why not climb to 50% in 5 years? Their profits pump. Although I get nothing out of it.
I think I better stop FUDding Tether as USDT collapse would rekt my portfolio as it would leave an exodus of capital from crypto.
At the end of they day, I don't and won't hold USDT (As EU's MICA protects me from it and Binance won't allow me trading USDT markets).
So I won't say anything besides 'Tether good': they pump my BTC bags. So that's that.
*Tether doesn't disclose borrower identities or loan terms for privacy reasons, but BDO checks a sample for collateral and overcollateralization.
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