I decided in the interests of my crypto education to Google "Tether". What an eye opener. My read, but correct me where wrong, is as follows.
Tether is s crypto backed by real US $ reserves, or so say Tether; so that 1 Tether coin is worth 1 US $. (B/S are you watching? Note that Tether does not have a limited supply and is based on double trust - trust in Tether corp and trust in US $.) So what is it for? It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks. Tether is in effect the US $ banker for the crypto exchanges. As I understand it Tether has become more than that - it is now a significant part of the crypto exchange market - being responsible for as much as 50% of any price rises. So when you see the bitcoin latest price in $ you are probably really seeing its price in Tether coins.
Now by a remarkable coincidence the amount of Tether coins in existence more than doubled to over $2bn during the recent bitcoin downturn. Where on earth did the Tether company get that amount of US $ to maintain their claim that Tether is 100% backed by US $? The obvious suspicion arises. Was Tether in fact "printing" these coins (could happen even for non central bankers don't you agree B/S?) so as to support the bitcoin price? Does that explain the mini dead cat bounce? In the last 24 hours 1.7bn Tether coins were transacted. Is that what is supporting the market? To fuel this conspiracy theory Tether is unable to provide audit proof that it has the US $ backing for these coins and in fact its accountants ditched them very recently and it is under investigation by the US authorities.
The Daily Telegraph predicts that if Tether is exposed as not having these reserves then there would be an immediate 80% fall in the bitcoin price. Does anybody really believe that Tether has those US $ reserves backing its coins? I think Boss the timing of the burst is becoming clearer - weeks rather than months. tecate you are right, Tether is the key to all this, and I respect your judgement for getting out until (if) it gets sorted. People like jman will of course continue to see bull signs, no hope there I'm afraid.
(B/S are you watching?
In fairness, given the allegations of price manipulation and bitcoins current price trajectory, methinks it is time to sell up some more. Another 40% of my holding gone today. I'm down to 20% of what I held at most
Note that Tether does not have a limited supply and is based on double trust - trust in Tether corp and trust in US $.
So what is it for? It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks. Tether is in effect the US $ banker for the crypto exchanges
Where on earth did the Tether company get that amount of US $ to maintain their claim that Tether is 100% backed by US $? The obvious suspicion arises. Was Tether in fact "printing" these coins
To fuel this conspiracy theory
Tether is unable to provide audit proof that it has the US $ backing for these coins and in fact its accountants ditched them very recently and it is under investigation by the US authorities.
The Daily Telegraph predicts that if Tether is exposed as not having these reserves then there would be an immediate 80% fall in the bitcoin price.
Does anybody really believe that Tether has those US $ reserves backing its coins?
So essentially it "printed" a bunch of coins, which by themselves had nothing going for them - then claimed they were backed by US$ reserves....and the banks fell for this?
What banks fell for this?
It's getting very complicated.
So what is it for? It is to enable crypto transfers of US $ so as to make the crypto exchanges fast but mostly because crypto exchanges find it difficult to have relationships with conventional banks. Tether is in effect the US $ banker for the crypto exchanges
The idea behind Tether is that it tracks the USD and they are to hold equivalent USD. It was/is used by people holding other crypto's when they want to opt out of whatever crypto they're holding. Cashing out to FIAT can be expensive and difficult.It's getting very complicated.
Is this correct?
Tether issued these coins.
Bitcoin owners bought them with BTC.
Presumably some eejits actually paid cash for them as well.
Now the promoters of Tether own a lot of Bitcoin and have a lot of cash, although presumably not $2 billion in cash.
It's impossible to know how many people actually hold Tethers on average at any given time (the amount of the float that is in use per se) but this is the key figure to understanding the risks. The exchanges can have any amount of Tether but if the punters don't actually use them then it doesn't matter.
Of course it matters. The price of Bitcoin is being manipulated with false liquidity
It's Bitfinex/Tether buying BTC with Tether they've magic'ed up.I would have thought it was people buying bitcoin with tether, inflating the bitcoin price with unverified amounts of $US via Tether coin.
Those guys are not bothered. At this point they can issue it at will. No slick marketing required.From my reading it appears that all you need is some slick marketing and shiny teeth and hey presto! - you can trust that I have $2bn in reserve!
They are concerned that it could be subject to government shutdown.
The yanks supoena'd them but they don't have to comply. Hopefully they find a way to get at them and reign them in
I can't prove that a bag of air is worth nothing.
They are concerned that it could be subject to government shutdown.
https://cointelegraph.com/news/bitm...enough-cash-reserves-could-still-be-shut-down
All good with Tether then. Nothing to worry about as the money was in Puerto Rico all this time.....Well there was some money belonging to someone being held in some bank in Puerto Rico. What other assurances do people want??
No I don't think that is it. I think it is cruder than that. They allegedly issued the coins to themselves allegedly pretending they could do so because they had sufficient US $ to back these newly printed coins. They then allegedly used the freshly printed coins to buy bitcoin thus allegedly supporting the price. A very significant amount of supposedly US $/bitcoin trades are in fact Tether/bitcoin trades and create the illusion that real US $ are being used to but bitcoin.What banks fell for this?
It's getting very complicated.
Is this correct?
Tether issued these coins.
Bitcoin owners bought them with BTC.
Presumably some eejits actually paid cash for them as well.
Now the promoters of Tether own a lot of Bitcoin and have a lot of cash, although presumably not $2 billion in cash.
Brendan
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