[323]

> there is no upside to holding it

People don't hold tether because they love tether. They hold it because they need it to trade crypto. So you need to balance the risk of tether being a scam with the opportunity risk of not being able to trade because you don't hold it.

[NovemberWhiskey]

But that's not the case; is it? Many, many people who hold USDT could equally well hold USDC or GUSD, couldn't they?

[aaaaaaaaata]

Many exchanges have one or the other as a default, carrying different rules, or promotions(!) for using a particular stablecoin.

Some of these appear to be sponsored by/affiliated with Tether? That's where the rabbit hole really gets deep.

[Canada]

There's basically no markets for GUSD. Even if it's the most fully backed by dollar bank deposits option, it's pretty much illiquid.

[NovemberWhiskey]

Is there somewhere I can read an explanation of why? What you'd normally expect in a market like this is flight-to-quality.

[Canada]

(This is an analogy, but it's almost literally the reality for a massive global market that not seen by the mainstream)

I'm not sure where you would read about it. It's like this... Bahamas dollars are pegged 1:1. They can be spent interchangeably in the Bahamas. You can redeem them 1:1 in the Bahamas. Very credible.

But most people are not in the Bahamas, and can't redeem them where they are. The Bahamas won't let just anyone in, and it's expensive to go there anyway. (Oh sure, if you're American and live in Florida it's no big deal, but if you're Chinese or Indian or something it's a big pain in the ass) There are money changers in other places that will take Bahamas Dollars, but they'll only take your B$100 notes and you're looking at like 4% loss to sell them, and for all your 20s, 10s, etc nobody will give you more than 50% for them if they will accept them at all. So these things are somewhat redeemable if you're in Canada or France... but in many places they are not redeemable at all.

Or you could use this other thing called Tether that just works. It costs 0.25-0.50% to turn into local currency if you're talking $10,000+ amounts. It can be done in almost place on Earth where you have running water and electricity.

GUSD is basically like B$. So given that reality, it's a no brainer to take Tether over GUSD, even if you think Tether is shady.

This is also something I didn't get about Tether for a long time... it's actually successful because its operators are shady, not in spite of it. They have been doing whatever it takes to maintain actual liquidity, and has done so for years. Gemini does not, it just sits there and brags about how it could totally pay everyone back if it wanted to.

[aaaaaaaaata]

Loopring, Monero, and Ether should be doing better than they are, if that were the case.

Maybe that shift comes after the next leg down.

[323]

In theory, in practice it's more complicated. USDC usage is increasing, but it will be a while until it can displace USDT.