In the short term, they have the reserves for sure.

In the short term, this is more of a classic bank-run. The Terra-coin + Luna scared a lot of cryptocoin holders, and now they're running away from another stablecoin.

Even if Bitfinex had the money, the amount of traders leaving USDT has to be a colossal amount. The amount of money Bitfinex can transfer at any given time is limited, so the peg will bend and buckle.

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The big question is: does Bitfinex have enough reserves to weather the storm? Not just this short-term storm, but the whole shebang that's about to happen? We will find out... eventually.

UST / Luna had substantial reserves. But it clearly wasn't enough. Probably because Anchor promised 20% gains and there was simply more UST in existence than the amount of USD put into that system.

They are actually redeeming them on their website for anyone that wants to.

> @paoloardoino GM Reminder that tether is honouring USDt redemptions at 1$ via http://tether.to . >300M redeemed in last 24h without a sweat drop. 12:38 AM · May 12, 2022·

IDK, according to the graph on CoinMarketCap it has been down to mid-to-low 90s several times in the past, e.g. in early 2020.

Sure it's been really stable for a long time now, but might this just be another "bump"?

"Elsewhere on the website, there’s a letter from an accounting firm stating that Tether has the reserves to back its coins, along with a pie chart showing that about $30 billion of its dollar holdings are invested in commercial paper—short-term loans to corporations. That would make Tether the seventh-largest holder of such debt, right up there with Charles Schwab and Vanguard Group."

Commercial paper is not dollars, so tether effectively admits it is not backed. The risk of default on commercial paper is huge compared to dollars held in reputable banks' accounts.

I don't think they are backed. Too many signs suggesting otherwise.

Technically, i guess they could "have a little trouble acting so fast", buying everything at $0.9 and back up to $1, and pocket the difference, scolding people for their lack of faith.

Practically? Yeah, it's goner.

Acting shifty and buying into a de-peg could have been the business plan all along. They could be waiting for it to fall more so they can pocket more money.

They really do have the money, but would rather spend it on Lamborghinis and coke.