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Tether price manipulation

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Re: Tether price manipulation

#51

Post by tim333 »

shuntress wrote: post #14

Can someone please explain to me how Tether is "injected" into Bitcoin? The entire argument seems to hinge on this but it is not (as far as I can see) explained. Are people accepting Tether in trade for BTC under the assumption that Tether will always be exchanged 1:1 for USD when this is not actually the case? EDIT: The answer seems to be yes Tether is 1-to-1 with "I O U $1" and enough people are accepting these IOU…

Yeah that sort of language annoys me and is often a sign the writer doesn't really understand what's going on. There are two possible phenomena:

Legit: US$ are sent to tether, tethers are issued in exchange 1:1 and then used to buy bitcoin. This will tend to raise the price of bitcoin but only as long as people are sending real US$

Illegit: tether insiders just issue tethers without US$ backing, use them to buy bitcoin and probably try to sell the bitcoins at a profit becoming million/billionaires in the process. Sky's the limit really - you can issue crypto tokens in any amount though it could all collapse if people want to swap their tethers back to US$ and there aren't enough there.

>They then inject this into BTC, ETH, LTC, (and others) to cause prices to pump.

Means use the tether to buy BTC etc in exchange for tethers which will tend to raise prices if there are more buyers than sellers and people seeing the price rising will cause them to buy more.

Re: Tether price manipulation

#52

Post by Cthulhu_ »

oxygenjoe wrote: post #38

Or perhaps USDT is created as BTC price increases to ensure exchange liquidity of USDT, allowing it to to stay very close to $1

The net effect is the same though; the company behind Tether is printing money from nothing and selling it for USD or BTC (which can be sold for USD more reliably).

Re: Tether price manipulation

#53

Post by qeternity »

sneak wrote: post #32
qeternity wrote: post #15

The problem is that in the early days of @Bitfinex'ed this was all a bit of a sideshow because there was genuinely large interest from retail and the outcome of crypto was far less certain. However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". But in the depths of the March panic, Tether jum…

1 BTC will still be 1 BTC after the Tether scam and scammers are all history.

This is true. It's also the tremendous irony of bitcoin evangelists narrative that fiat is worthless yet constantly touting every ATH (which is priced in that supposedly worthless fiat). Who cares what BTCUSD is if USD worthless?

And then you realize that this is pure speculation and the most ardent supporters are just praying for the greater fool theory to rain good fortune on them.

You need look no further than Coinbase, supposed beacon of our crypto future, IPO'ing and raising money in...that worthless green piece of paper known as the US Dollar.

Re: Tether price manipulation

#54

Post by Cthulhu_ »

tomtomtom777 wrote: post #17

I still don't quite understand how they can manipulate the price. The price of a USDT is 1 dollar. They give out new USDT for $1 a piece. Sure, they may be spending these dollars elsewhere, thus holding a fractional reserve. Sure this may illegal and get them in trouble. But this doesn't effect the dollar value for which these USDT's and thus Bitcoins are traded. As long as a USDT is $1, nobody is manipulating the pr…

Not the Tether price, but that's not what the article is about; the article is that they print USDT and use it to buy BTC, increasing demand and causing the BTC price to go up. No dollars involved, not directly.

Re: Tether price manipulation

#56

Post by shuntress »

qeternity wrote: post #15

The problem is that in the early days of @Bitfinex'ed this was all a bit of a sideshow because there was genuinely large interest from retail and the outcome of crypto was far less certain. However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". But in the depths of the March panic, Tether jum…

>Bitcoin's narrative has had to morph from "digital currency" to "digital gold"

The narrative around bitcoin has always been "It is digital currency. It works like gold". Hence the notion of "mining".

EDIT: downvote me if you want but you are flat wrong

Section 6 in the bitcoin whitepaper explicitly likens bitcoin to gold [0]

>The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation

[0]: https://bitcoin.org/bitcoin.pdf

Re: Tether price manipulation

#57

Post by bootlooped »

c-fe wrote: post #34
shuntress wrote: post #14

Can someone please explain to me how Tether is "injected" into Bitcoin? The entire argument seems to hinge on this but it is not (as far as I can see) explained. Are people accepting Tether in trade for BTC under the assumption that Tether will always be exchanged 1:1 for USD when this is not actually the case? EDIT: The answer seems to be yes Tether is 1-to-1 with "I O U $1" and enough people are accepting these IOU…

So far the explanation I’ve come across goes as follows: someone creates tether. They use this tether to buy bitcoin, which drives up the prices of bitcoin. The more they buy, the more value their purchased bitcoin has. The trick seems to be that generating this tether should decrease the value of tether, however since everyone thinks its a stablecoin that is backed by usd 1:1, its value remains the same. The worst i…

Do most people even believe that Tether is backed 1:1? Or are they just playing along because it's in their interest?

Re: Tether price manipulation

#59

Post by Triv888 »

shuntress wrote: post #14

Can someone please explain to me how Tether is "injected" into Bitcoin? The entire argument seems to hinge on this but it is not (as far as I can see) explained. Are people accepting Tether in trade for BTC under the assumption that Tether will always be exchanged 1:1 for USD when this is not actually the case? EDIT: The answer seems to be yes Tether is 1-to-1 with "I O U $1" and enough people are accepting these IOU…

They can buy BTC with the newly minted coins.

Re: Tether price manipulation

#60

Post by [deleted] »

raesene9 wrote: post #36
xur17 wrote: post #30

The graphs show a strong correlation between printing of USDT and the Bitcoin price rising, but it's not clear to me which one triggers the other. Interestingly, USDC seems to follow similar minting patterns, and they post quarterly audits of their books / are much better regulated.

They are better regulated and therefore less risky than Tether, which raises the interesting question, Why is USDC circulation only 20% of Tethers...

[deleted]
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