The arithmetic of a run on a stablecoin. According to the Commodity Futures Trading Commission, in the summer of 2017 the reserve behind 442 million USDT in circulation never exceeded $61.5 million. As long as nobody asks for the dollar back, the token is worth a dollar.
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From the book
Nobody Owns Money · Chapter 29
The Dollar Nobody Has Seen
Next to this experiment in the chapter
From there the mechanism runs by itself. Fresh USDT buys bitcoin, bitcoin goes up, and after bitcoin everything else goes up, because nearly all tokens trade in pairs with bitcoin or with that same USDT. Newcomers, hamsters in exchange slang, see the rise and bring real money to the exchange. Their money becomes what everything printed and pumped earlier gets sold for.