The hedge fund started exploring the short last July, according to the report, and its bear thesis has to do with the $24 billion in commercial paper backing the token. Much of that debt is tied to Chinese real estate developers, at least some of which are struggling, believes Fir Tree. If the paper loses value, that would potentially lead to a big drop in Tether reserves, and the coin’s price.
Hedge Fund Fir Tree Makes ‘Big Short’ Bet Against Tether: Bloomberg
