when banks were buying bonds at 2%.... then bonds went to 4% no institution wanted to buy the 2% bonds for the bearers to cash out.. which caused them to have to sell bonds below 1:1 to tempt buyers.
this caused many banks to get in trouble. so investing in fiat bonds didnt work out well. however bitcoin can have down times too. so a fair balance of bonds and btc to hedge each other to know which to sell first to get best cash access is smart.
Simply put Tether's move is showing that they are gradually reducing their reliance on the banks. Because should anything happen to the us Treasury bills it will affect them too. this caused many banks to get in trouble. so investing in fiat bonds didnt work out well. however bitcoin can have down times too. so a fair balance of bonds and btc to hedge each other to know which to sell first to get best cash access is smart.
Tether already knows the high risk involved if they rely on a single asset reserve therefore I see their diversification as thinking way outside the box.
a bank account is only federally insured for a few hundreds thousand. not millions.. so yes many would invest the other billions in things like bonds to ensure it against bank runs.. however when investments go bad de-pegging can happen if they cant unlock the investments to make the dollar balance whole if large investors decide one day to withdraw real fiat from tokenised fiat..
some services will put 72 hour holds on balances of a certain size. but even a 3 day hold wont recoup losses if a bad investment went bad
