Hedge fund Fir Tree Capital Management, which manages $4 billion in assets, has opened a large short position on the most popular stablecoin USDT.
According to Bloomberg, citing one of the fund’s clients, Fir Tree’s management is confident that the exchange rate of the stable cryptocurrency Tether will fall. To open a “short” Fir Tree traders took advantage of “asymmetric trading”, which allows you to reduce a possible loss, but keep a large potential profit. Hedge fund analysts have been studying the possibility of opening such a deal since July last year.
The main reason for this decision is that $24 billion of USDT stablecoin security is in the form of securities of Chinese developers. And this industry in the Middle Kingdom is now in a serious crisis and many of these companies may go bankrupt. Accordingly, this will significantly hit the USDT collateral, which may lead to its fall.
Analysts at Fir Tree Capital Management expect that profits on the “short” can be fixed within 12 months. At the same time, the hedge fund can also launch a separate fund for short positions on USDT, which will be open to the company’s clients.
Recall that concerns about the lack of security for the stablecoin Tether have arisen repeatedly. In May last year, the company published a detailed report showing which assets hold USDT collateral.
Source: Bits
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