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Tether price manipulation

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Re: Tether price manipulation

#221

Post by FabHK »

whimsicalism wrote: post #177
xur17 wrote: post #115

Earlier quoted context omitted.

https://tether.to/faqs/ > Unfortunately, Tether has decided to stop serving U.S. individual and corporate customers altogether. As of January 1, 2018, no issuance or redeeming services will be available to these users. Exceptions to these provisions may be made by Tether, in its sole discretion, for entities that are: Established or organized outside of the United States or its territorial or insular possessions; and…

So as source for the claim that you "can't redeem tether", you are linking to something that says you can redeem tether?

> something that says you can redeem tether

Tether, in its sole discretion, may choose to redeem tether, as long as you're a corporation with over 10m USDT incorporated outside the US.

I'd say that's not an ironclad guarantee that you can redeem tether.

Re: Tether price manipulation

#222

Post by csomar »

qeternity wrote: post #219
csomar wrote: post #216

Earlier quoted context omitted.

People can sell USDT for crypto, USDC or offline. If Tether didn't have good reserves, the price will diverge from 1:1.

No, instead of just stating it, explain to me. Tether's reserves only matter when people try to redeem Tethers. This is currently not possible. So it is purely a trust game right now, and everyone has an incentive to trust (or turn a blind eye) that Tether is playing by the rules.

> Tether's reserves only matter when people try to redeem Tethers. This is currently not possible.

This is why being liquid and freely trade-able matters. Tether is fully redeemable if you can trade it against other crypto/stable coins. Want to redeem USDT? exchange it to USDC and then withdraw to your bank account.

Re: Tether price manipulation

#223

Post by nicky0 »

paulgb wrote: post #203
fuzzylightbulb wrote: post #191

Earlier quoted context omitted.

> backed by literally nothing It is the only thing the government accepts for tax payments. Given that you can be arrested for not paying your taxes it is "backed" by the barrel of a gun, a threat to your very being. In one sense this is the only real thing there is.

Indeed. A thought experiment: say the US government created a USD-prime currency that floated freely from USD. You could still use the USD in private transactions, but the US government would only transact and tax in USD-prime. What would be the fate of the original USD? My belief that it would go to zero. I’m curious whether “fiat is backed by nothing” proponents would disagree.

Both fiat currency and Bitcoin are backed by the same thing: mass belief. An incredibly powerful thing.

Re: Tether price manipulation

#224

Post by hannasanarion »

JohnJamesRambo wrote: post #175
user22 wrote: post #135

Earlier quoted context omitted.

I have a question, isn't the problem with the gold standard that the amount of dollars is fixed and in order to have enough currency to drive a rapidly growing economy you would in essence be buying a gallon of milk for .25 cents? It seems to me that either you the amount of currency in circulation needs to increase or the value of the existing currency needs to increase. Taking into account the gold standard was use…

https://wtfhappenedin1971.com/ This was posted to HN and it was quite eye-opening. For those that don’t know, 1971 was when the gold standard was abandoned by Nixon. I don’t know if the graphs are cherry-picked and I hope they were honestly since the US is never going back to the gold standard and it seems to have far-reaching negative effects in every aspect of human life. To answer your .25 cent milk question it se…

The change from the gold standard is almost certainly a coincidence. Whether the dollar is backed by gold or government promises doesn't make businesses decide to give less money to their workers and more to their CEOs.

A much more relevant development in the 70s was the switch in economic policy priorities from demand-side to supply-side. Nixon was the first president who prioritized tax cuts, union busting, subsidies, and legalizing outsourcing to cheaper labor markets in China and SEA. Every government since has given corporations a blank check to cut labor costs by any means necessary to prioritize profit.

Re: Tether price manipulation

#225

Post by shuntress »

tim333 wrote: post #170
shuntress wrote: post #147

Earlier quoted context omitted.

In what way is Tether not a fiat currency?

Investopedia has: >Fiat money is a government-issued currency that isn't backed by a commodity such as gold. Tether fails the government-issued bit.

In what meaningful way is Tether not a fiat currency?

Re: Tether price manipulation

#226

Post by beaned »

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…

How do you square this with the observation that other fiat-backed stablecoins like USDC, which are obviously legitimate, are also printing massively?

It would seem to me that if transparent stablecoins with utility are going up, the simplest explanation for tether going up is that it serves the same role for people who have either become accustomed to it from its earlier availability, or have it as their only option due to jurisdiction. Not anything nefarious.

There seems to be little actual evidence to support conspiracy theories that Bitcoin's price movements are due to mismanagement of tether.

Re: Tether price manipulation

#227

Post by csomar »

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...

> They are better regulated

You just answered your own question.

Re: Tether price manipulation

#228

Post by chalst »

JohnJamesRambo wrote: post #175
user22 wrote: post #135

Earlier quoted context omitted.

I have a question, isn't the problem with the gold standard that the amount of dollars is fixed and in order to have enough currency to drive a rapidly growing economy you would in essence be buying a gallon of milk for .25 cents? It seems to me that either you the amount of currency in circulation needs to increase or the value of the existing currency needs to increase. Taking into account the gold standard was use…

https://wtfhappenedin1971.com/ This was posted to HN and it was quite eye-opening. For those that don’t know, 1971 was when the gold standard was abandoned by Nixon. I don’t know if the graphs are cherry-picked and I hope they were honestly since the US is never going back to the gold standard and it seems to have far-reaching negative effects in every aspect of human life. To answer your .25 cent milk question it se…

Those graphs paint a fair picture of the nature of the crisis, but I am not so keen on their explanation.

Nixon ended gold convertability, but the USD was not on a true gold standard and was in danger of not being able to fulfill this obligation. The standard was Bretton Woods, it was an international framework for finance, and it was the failure of the framework together with the OPEC oil crisis that caused the mess documented in those graphs.

Re: Tether price manipulation

#229

Post by dandanua »

csomar wrote: post #201

OP gives no proof that Tether is not holding 1:1 reserves. There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. Bitcoin price dropped to $4.000 last year and Tether exchange rate has held pretty well. It is important to mention that USDT is still liquid despite the lack of USD on/off-ramps. People regularly sell USDT on the offline market, and can exchange to USDC on many ex…

The proof is that Tether almost never deleted any of its tokens, even when Bitcoin dropped significantly, e.g. from $10k to $5k in 2020. Does it mean that no one wanted their USD back from Tether organization? I highly doubt it.
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