I would trust Tether more if it ever had meaningful outflows in dollar terms, had $1bn or so in the last crash (https://coinmarketcap.com/currencies/tether/) but has been generally on an upward march, not what you would expect from a stable coin
Tether price manipulation
61–70 of 490 posts
Re: Tether price manipulation
#62I agree that USDT is fishy and it may be behind a large percentage of the gains in BTC and the other coins.
However, there is also another possible explanation. When investors want to buy BTC they first to go Binance and ask for USDT in exchange for USD. Binance creates new USDT for them. Then they use the USDT to buy BTC (reverse causality). Just saying it's possible, but I believe Jacob Oracle to be right.
Re: Tether price manipulation
#63I 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…
>The price of a USDT is 1 dollar. They give out new USDT for $1 a piece.
If this were the case, Tether would be back by cash. But it isn't: they claim it's backed by cash, cash-equivalents and receivables from loans, including loans to affiliated entities (or some similar language).
So, for example: they could create 1M USDT and immediately loan it to their associated crypto-hedge-fund (for zero interest). The hedge-fund promises to repay that loan in USD (creating 'reserves' for USDT), and immediately places buy orders for Bitcoin; generating demand for Bitcoin that will raise the price.
Re: Tether price manipulation
#64The 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…
>does not have a "killer app" and is 99.99% used for speculation
You could argue speculation is the killer app. I'm not a fan but it's hard to deny it's a huge business and some people seem to like it. Kind of like Las Vegas in a way.
Re: Tether price manipulation
#65Can 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 bitco…
The thing I don't understand about the "Illegit" method is that it relies on people accepting USDT for BTC and then not cashing them out to real USD. Because if the company is printing USDT it wouldn't have the cash to pay the people trying to cash out USDT. So to allow this to happen you would need a people to be holding a huge amount of USDT.
Re: Tether price manipulation
#66Earlier quoted context omitted.
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 Coi…
> 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.
is it possible to do an ipo in crypto?
Re: Tether price manipulation
#67I agree that a Tether reckoning is coming, but point #10 of that thread is the most important: it could be weeks, months or _years_ before it's fully corrected, so be super super super careful about using Tether as a reason to short Bitcoin... "The market can remain irrational longer than you can remain solvent"
It's even worse than that. Shorting TSLA is dangerous because of the above. But it's mitigated by people purchasing shares with real fiat. They have a natural incentive to not be absurd: whether or not $800/share is absurd is a matter of opinion...but everyone would agree that $1m/share is absurd.
Tether has no such limitation. All the exchanges are complicit in this, wash trading is rampant, and there's an de facto central bank run by actual criminals. There is absolutely zero reason why iFinex can't take bitcoin to $100k or $1m or whatever they like. They only have opportunity costs.
The only thing keeping them in check right now is the appearance of legitimacy. If they were to overdo it, people might actually sell, which is not what they want. So until their legitimacy is tested (Jan 15) they will probably responsibly grind this higher. But on the last day, I expect billions and billions of USDT issuance so that they can run stops on every short in the market, collecting their last few shekels before the music stops and they vanish to an island somewhere.
Re: Tether price manipulation
#68Would we not expect this same pattern if Tether was printed in response to money coming in?
Meaning yes, they don't have USDT 100 % fully backed, but they aren't printing it out of thin air either.
What surprises me are the incredible volumes in USDT -- why would anyone ever use USDT instead of USDC, DAI or BUSD? All of them are much more transparent and less risky.
Re: Tether price manipulation
#69Can 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.
This makes zero sense. Why not just use USD?
The entire point of Tether seems to be that it is always valued to be exactly 1:1 with USD. And that seems to somehow convince people that entities who cannot obtain a loan of USD can obtain a loan of Tether?
Re: Tether price manipulation
#70What a ridiculous Twitter thread showing absolutely no causality between Tether and Bitcoin. You might as well show that SpaceX rocket launches coincide with a rise in Bitcoin prices. There was a successful SpaceX launch yesterday, and Bitcoin went over $40,000 for the first time. In 2020, SpaceX had its best year ever for successful launches and returns of the first stage, perfectly coinciding with Bitcoin's meteori…
Upvote this gentleman for being the final trinity-piece in this mystery! HN-user Speednet is 1/3 rd of bitcoin's success!
I can see I've been downvoted. I must have made a mistake. Bitcoin prices are actually tied to Elon Musk's rising wealth, not SpaceX launches.