I was scrolling through cmc and I didn't realise until now that tether has the 4th highest market cap at ~$20bn. This feels like a really high risk asset and that's probably reflected in it having a 5x market cap daily trading volume.
It's probably just something to take note of that if it isn't physically backed and we see massive volatile moves then don't trust it to peg the dollar especially if it keeps getting a higher and higher pool of funds that are thought to control it (its a shame a lot of sites use it in futures).
Definitely. And IIRC there was actually a change in their T&Cs just a few years back that allowed them to essentially do fractional reserve and count non-cash assets as reserves even though their initial mantra is that USDT should be backed 1:1 by physical cash.
It is essentially a bank without a banking license, if you think about it. And I think that will be liable to falter for sure come some sort of liquidation crisis/bank run.
I would not use USDT for any more than day-to-day transactions, as the market's high turnover of the token seem to suggest. Do NOT use it as a store of value. But even then, there is a risk at any instant that the fractional reserve is going to collapse.