Bloomberg: $4 Billion Hedge Fund Fir Tree Is Shorting USDT

This article comes fromDecrypt, original author: Scott Chipolina

Odaily Translator | Nian Yin Si Tang

Odaily Translator | Nian Yin Si Tang

According to Bloombergto reportFir Tree Capital Management, a $4 billion hedge fund, is shorting Tether's stablecoin USDT as the cryptocurrency's most valuable stablecoin faces regulatory scrutiny.

According to Bloomberg

to report

The hedge fund is also reportedly betting that its decision could be profitable within 12 months. The firm’s concerns center on Tether’s $24 billion in high-yield commercial paper, which it also believes is tied to Chinese property developers.expressChina's real estate industry has been facing a debt load led by China Evergrande Group. The group missed its debt repayment deadline in December 2021, when its debt topped $300 billion.

Although Tether

, which does not hold any commercial paper related to Evergrande, but Bloomberg reported that Fir Tree expects some of Tether’s commercial paper holdings to depreciate.

According to reports, investors said this could lead to a significant decline in the reserves held by Tether.

Fir Tree began to consider shorting USDT in July last year, and has conducted research including hiring third-party experts. At the same time, if enough customers are interested, Fir Tree is also considering setting up a separate fund to short USDT.secondary title。

Tether’s latest quarterly guarantee opinion released last month showed that commercial paper holdings in the last fiscal quarterdisclosuredown 21%

In May last year, Tether was launched for the first time since its launch in 2014.

disclosure

details of its reserves. As of March 31, 2021, Tether held reserves comprising nearly 76% of cash and cash equivalents and other short-term deposits and commercial paper. The rest are secured loans, bonds and other investments, including digital currencies such as Bitcoin (Bitcoin only). Specifically, commercial paper made up the bulk of its cash and cash equivalents, accounting for a 65% share. Trust deposits accounted for 24%, reverse repurchase bills accounted for 3.60%, treasury bills accounted for about 3%, and actual cash accounted for only 3.87%.Despite previous claims that Tether was 100% cash-backed, the company’s breakdown of reserves at the time showed that less than 3% of Tether’s reserves were actually held in cash.。

In August 2021, another attestation report found that Tether received a total backing of $62.7 million. A total of $30.8 million of this was in commercial paper.