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Fir Tree Hedge Fund Places a Sizable Short Bet Against Tether

According to the firm’s clients, the asymmetric bet restricts the downside but promises large rewards if correct.

According to a Bloomberg article on Friday, Fir Tree Capital Management, a hedge fund with $4 billion in assets under management, has put a significant short bet against the stablecoin tether (USDT).
According to Bloomberg, the position was organised as a “asymmetric trade,” with a little downside risk and a huge potential return, according to Fir Tree clients.

According to the storey, the hedge fund began exploring taking a short position on USDT in July.

The business reasoned that because a large portion of the $24 billion in commercial paper supporting the token is related to struggling Chinese real estate developers, if the paper loses value, it might result in a significant decline in both Tether’s reserves and the coin’s price.

According to Bloomberg, Fir Tree is wagering that its trade will pay off within a year.

Additionally, if sufficient client interest exists, the business is considering establishing a separate fund dedicated to shorting tether.


Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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