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Tether’s Reserve Attestations: Commercial Paper Down, Treasurys Up

The Breakdown

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Tether's Reserve Attestations

We suspect that the liquidity in token such as tether is directionally sensitive. Tethers investors can either redeem their holdings directly from tether, or they can sell them in the secondary market. We think that willingness to absorb losses suggest that token might be prone to peremptive runs. In tether's case, the pressure to sell is intensified by the inability of most investors to redeem directly.

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