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Tether price manipulation

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Re: Tether price manipulation

#141

Post by Uberphallus »

dmichulke wrote: post #102
lukebuehler wrote: post #95

Earlier quoted context omitted.

I’ve been wondering if Tether is really a scam for a long time. In all these analyses, one key point is missing: arbitrage traders have to make up for the sell pressure on USDT when Tethers are being printed and sold for BTC. Can anyone show me how there is a plausible mechanism/scheme/conspiracy that keeps the USD/USDT exchange rate stable while a crazy amount of illegitimate Tethers are being printed? Edit: typo an…

Exactly, I don't say OP is wrong but I need to see how I can 1. buy X for USD 2. buy BTC for X Shouldn't the price for X then stay the same? (Bought X once, sold X once) Assuming X drops to 0, wouldn't people that have BTC just use another coin X' to get back to USD? Assuming company Y creates X out of thin air and buys BTC with it, why doesn't X drop in value? Because arbitrageurs buy it? So arbitrageurs have lots o…

Since they can print X and they peg it to USD, it won't change in price itself, but nothing can assure the driving force of BTC price is actual demand.

Re: Tether price manipulation

#142

Post by londons_explore »

bootlooped wrote: post #57
c-fe wrote: post #34

Earlier quoted context omitted.

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?

All we can be sure of is that the money put into tether is greater or equal to the money taken out.

If people didn't believe it, they would sell (either for BTC or real dollars), and if enough people did that then tether would collapse.

My suspicion is there are enough dormant tether holders that the above will never occur, even if there have been some substantial fraud losses.

Re: Tether price manipulation

#143

Post by gruez »

samvher wrote: post #120
shuntress wrote: post #56

Earlier quoted context omitted.

>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 expe…

That may be true but there is definitely a difference between the way people talked about it earlier ("later we will all be paying with bitcoin") to how it is now ("it's a store of value and maybe there is potential for bitcoin-backed currencies").

I think the scaling limitations were well known at the beginning. If Bitcoin were to get as large as visa/mastercard the blockchain would be growing at a rate of a few gigabytes per day, which would kill decentralization.

Re: Tether price manipulation

#144

Post by raesene9 »

dmichulke wrote: post #134
raesene9 wrote: post #123

Earlier quoted context omitted.

That only works when people take payment in BTC without translating the value provided back to a Fiat currency. Until that time, expansion of the USD (or other Fiat) supply impacts the "value" that BTC has.

During the gold standard, did people take payment in gold? I don't think so... They used paper that symbolized "withdrawal rights to gold". USD (or any other piece of paper that people agree has a value) is a perfect currency for exchange, it's just not a great store of value.

The point I was responding to was saying that they wanted to get away from USD and that this was BTC's killer app.

My point is that you can't "get away" from USD, while the BTC market is effectively tied to USD.

so if the USD supply is massively inflated, and people can use those USD to buy BTC, the tie is still there.

If and when people denominate their goods and services in BTC without any reference to a fiat amount, then they are decoupled and BTC loses the tie to USD.

Re: Tether price manipulation

#146

Post by virgilp »

tim333 wrote: post #98
qeternity wrote: post #39

Earlier quoted context omitted.

The fact that the above still remains true 3 years later is pretty damning.

It also suggests things will go on and we'll be in much the same situation in years going forward.

No it does not - that's an invalid inductive conclusion.

There are clear deadlines that may change everything (apparently Jan 15th might be one of them, from the twitter thread). Justice takes time, but trials do eventually come to a conclusion. If that conclusion is to kill the mechanism that pumps BTC, then all bets are off.

Re: Tether price manipulation

#147

Post by shuntress »

tim333 wrote: post #75
Traster wrote: post #65

Earlier quoted context omitted.

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.

People do hold USDT. I hold some myself. If you are going to buy crypto again it saves the hassle and expense of converting into fiat money and back again. The majority of exchanges can't actually hold fiat money due to regulatory issues. Also I imagine some people are hoping to avoid the taxman by keeping it in crypto though that's legally not kosher.

In what way is Tether not a fiat currency?

Re: Tether price manipulation

#148

Post by puranjay »

JohnJamesRambo wrote: post #119
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…

The killer app for Bitcoin is escaping government fiat money that is backed by literally nothing at all and is being printed at increasingly alarming rates. 40% of all USD ever created were “made” in 2020. That will have repercussions for decades and isn’t a currency I want to stay in. https://fred.stlouisfed.org/series/M1 Ironically (or not) Bitcoin was created in 2009 right when that graph gets really crazy.

> literally backed by nothing

Backed by $750B in annual military spending

Re: Tether price manipulation

#149

Post by puranjay »

caeril wrote: post #94
tim333 wrote: post #64

Earlier quoted context omitted.

>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.

It definitely has a killer app. Probably not a big enough app to justify these prices, but one nonetheless. As Stripe, PayPal, Visa, Gofundme, Patreon, et. al. shut down avenues of payments for legal, but unpopular purchases, BTC is the obvious workaround. Vendors of firearms, pornography, legal funds for unpopular causes, dissident content creators, etc have become increasingly estranged from the "normal" payments m…

Privacy coins are far more suited for skirting regulations. If that's the killer app, you would see mass adoption of Monero, not BTC

Re: Tether price manipulation

#150

Post by gillesjacobs »

gruez wrote: post #136

>4) How the scam works: >Tether can print infinite amounts of (worthless) $USDT. >They then inject this into BTC, ETH, LTC, (and others) to cause prices to pump. >Notice how during the months they stopped printing Tether, the market moves sideways or drops significantly. >This graph also shows the extent to which USDT plays a role in Bitcoin's price action over the years. I don't get it. This doesn't really prove any…

Exactly my issue with OP's argument.

If BTC price rises, trade volume grows, increasing demand for stablecoins due to their utility as a low-volatile alternative to fiat to bypass legislation. You would EXPECT this pattern to arise. Note also how OP does not show a graph of trade volume/buy-sell volume which would potentially show that it is used as claimed.

I still think Tether is extremely shady for refusing audits and dubious backing. I avoid it like the plague and hope others are as smart.

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