This is more than irrational movement. Remember a few months ago when we were laughing about how Tether (USDT) was backed largely by an asset class called commercial paper? They have been on a warpath printing billions. They have stated reasons for these mints if you have an inclination to listen to lies.
Okay now that we have that settled let's discuss the current climate in China. Evergrande, the second biggest real estate developer, and the single largest issuer of commercial paper, you will be hearing that word a lot over the coming weeks, will finally be defaulting on it's outstanding debts. The news officially broke about a month ago, but they were able to limp along and make some bond payments to some buyers particularly their native Chinese buyers. So the question is how exposed is the Tether treasury? Unlike BlackRock where we know how many millions they had in these funds, there is a big question as to how much if at all Tether is exposed to this contagion event which is already having a domino effect into other commercial paper issuers. There was of course the stablecoin hearing yesterday which any representative from Tether could have attended but opted not to. This will end in an UGLY way. Reckless printing and unlimited supplies tend to have bad outcomes as most fiat reaches its actual value zero.
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Have a good week everyone. Buy the dip!