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Tether price manipulation

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Re: Tether price manipulation

#271

Post by Majromax »

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.

> USD [...] is a perfect currency for exchange, it's just not a great store of value.

USD is a fantastic store of value. Since 1982 (arguably the beginning of the modern inflation-targeting era), the USD has lost no more than 6.3% of its value year-over-year, nor gained more than 2% (CPI measured, source https://fred.stlouisfed.org/series/CPIAUCSL#0).

In contrast since 2016, Bitcoin has 60% of its value year-over-year (2018) and gained 1700% (also 2018).

A store of value is not a story of appreciation and hoping for a gain, it's a story about holding a stable and most importantly predictable value into the future. The USD more than satisfies this condition. Bitcoin does not, no matter its speculative merits.

Most importantly, society does not owe people a fictional store of value guaranteed to never lose purchasing power. People don't eat quarters, nor do they live under dollar bills. It strains credulity that a nominal token (however minted) should hold a guaranteed value, without taking capital-like risks required of any productive investment.

Re: Tether price manipulation

#272

Post by lawn »

shuntress wrote: post #56
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 expe…

The whitepaper only likens Bitcoin to gold in regards to the emission rate, not to it's supposed usage as "digital gold".

In fact the whitepaper even opens with describing Bitcoin's usage for commerce. The very first paragraph in the introduction!

The narrative has indeed changed to "digital gold" after it's made abundantly clear that Bitcoin is no longer suitable for commerce.

Re: Tether price manipulation

#273

Post by Slartie »

csomar wrote: post #262
Slartie wrote: post #256

Earlier quoted context omitted.

If Tether Ltd. had at any point in time made any significant USDT -> USD redemptions that outweighed the new USDT given out to new buyers, we should have seen that by a significant number of Tethers being destroyed. Looking at the historic Tether market cap on CoinMarketCap - which is practically equal to all non-destroyed tethers due to USDT being pegged to the USD - however does not reveal any significant drop in T…

Posting this again: https://coinmarketcap.com/currencies/tether/ They did redeem from 2.8bn to 1.7bn. Which is like 40% of their total value at the time. Is that significant enough?

Ah yeah, you got me. Though I don't really count that as good evidence for an actual "redemption" since it apparently was burning Tethers that came from Bitfinex: https://www.coindesk.com/tether-just-burned-500-million-usdt...

And since Bitfinex is the owner of Tether Ltd., there is unfortunately no outsider that could credibly confirm to have actually received any USD in exchange for those burned Tethers. Bitfinex might just as well have sold Bitcoins from its own stash (or from customer wallets) to others for USDT and then burned those USDT in order to stabilize the USDT/USD price which wasn’t exactly holding up well at that time. If they had actually printed more USDT than they have USD in the past, this would be a smart move in order to distribute the "missing" funds more evenly across multiple crypto coins in their custody, which makes it less likely for them to run out of one of them and thus makes it less likely for the alleged scam to come to light.

Re: Tether price manipulation

#274

Post by Slikey »

gillesjacobs wrote: post #167
c-fe wrote: post #105

Earlier quoted context omitted.

like I mentioned above, it is speculated that they are the ones who are printing the tether, then use that to buy bitcoin. They are then probably hoping that whoever receives tether for selling their bitcoin does not immediately want usd, but instead is happy with the tether as it is 'backed 1:1'. (Again, I have to stress that this is a theory i read somewhere on the internet, while lots of things add up, it may also…

> But who is selling their (temporarily) valuable bitcoin for worthless tether instead of USD? You're asking what the utility of stablecoins is: Stablecoins are widely used as a legislatively advantageous on- and off-ramp for the whole crypto market. Off-ramp: If people want to sell BTC or other volatile tokens because they want to realize profits, the obvious thing would be to sell for fiat (USD/EUR). But due to tax…

This sounds incredibly illegal. I can't imagine trading like this is wanted by legislators and even if Tether is currently backed 1:1 there is no way that legislators will allow this to keep happening eventually crashing the entire Tether currency into the ground.

Re: Tether price manipulation

#275

Post by TomSwirly »

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…

> However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation

With all due respect, this is completely wrong - crypto has the same killer app it has for years, and that app is _crime_.

Whether you're buying drugs, paying anonymous extortioners, accepting bribes, money laundering, or tax evasion, cryptocurrency is the go-to choice for electronic funds transfer for your modern criminal.

Re: Tether price manipulation

#276

Post by [deleted] »

shuntress wrote: post #96
40four wrote: post #78

Earlier quoted context omitted.

It’s not individuals buying Tether from Bitfinex and then buying Bitcoin that causes this. It is Bitfinex as an organization ‘printing’ free money and using it to pump the market.

> Bitfinex as an organization ‘printing’ free money and using it to pump the market. How?

[deleted]

Re: Tether price manipulation

#277

Post by gruez »

therein wrote: post #261
beaned wrote: post #226

Earlier quoted context omitted.

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…

Except for timing time after time. Most rallies have a corresponding Tether print right prior to them.

The price of an asset goes up when money is being poured into the asset. For many exchanges "money" means USDT, so it makes perfect sense that USDT would be printed before a rally, regardless of malfeasance on tether's part.

Re: Tether price manipulation

#278

Post by FabHK »

sjs382 wrote: post #252
qeternity wrote: post #213

Earlier quoted context omitted.

Too late to edit my original comment but a lot of people pointing to the "peg" as proof that Tether is legitimate. The only peg that exists is the one whereby you should be able to go to Tether Inc and redeem USDT for USD 1:1. That peg has never ever been demonstrated (publicly). All the other "pegs" are just cash trading. If I trade USDT/USD on Binance...I don't actually have USD. Even on that pair, my USD profit/lo…

> For anyone who disagrees with the above - please show me market where I can go sell my USDT directly for USD. Genuinely curious, as someone who has never used Binance nor USDT: Why is the "directly" part here significant? If I can USDT (Binance) -> USD (Binance) -> BTC (Binance) -> BTC (Coinbase) -> USD (Coinbase) -> USD (My Bank), then whats the difference other than a few extra steps?

Apart from the fact that there are transaction costs and time delays (it'll take about half an hour after you bought BTC on Binance that you can sell them on Coinbase), what guarantees that the BTC price is the same on Coinbase and Binance?

Well, arbitrage! But suppose BTC it is much higher on Binance. You'd then take USD and transfer them to Coinbase:

USD (Coinbase) -> BTC (Coinbase) -> BTC (Binance) -> USDT (Binance) -> ??

Now you need to take these USDT and turn them into USD, to keep the arb running. But that is precisely what doesn't work.

So: the chain you outline is NOT a way to "directly sell USDT for USD", as links can break down.

Re: Tether price manipulation

#279

Post by nradov »

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 crypto killer app is evading China's currency controls. Pay for mining hardware and electricity in renminbi, transfer cryptocurrency to foreign countries, exchange for convertible fiat hard currency (dollars, euros, etc.).

Re: Tether price manipulation

#280

Post by atomicnumber3 »

sjs382 wrote: post #252
qeternity wrote: post #213

Earlier quoted context omitted.

Too late to edit my original comment but a lot of people pointing to the "peg" as proof that Tether is legitimate. The only peg that exists is the one whereby you should be able to go to Tether Inc and redeem USDT for USD 1:1. That peg has never ever been demonstrated (publicly). All the other "pegs" are just cash trading. If I trade USDT/USD on Binance...I don't actually have USD. Even on that pair, my USD profit/lo…

> For anyone who disagrees with the above - please show me market where I can go sell my USDT directly for USD. Genuinely curious, as someone who has never used Binance nor USDT: Why is the "directly" part here significant? If I can USDT (Binance) -> USD (Binance) -> BTC (Binance) -> BTC (Coinbase) -> USD (Coinbase) -> USD (My Bank), then whats the difference other than a few extra steps?

It's basically the difference between a fiat currency and one backed by something.

For example, something vaguely analogous would be:

[Setting: The Olden Days] GP: "I'm concerned because nobody has ever tried to take USD to the government and directly get silver/gold for it." You: "Why is the "directly" part here significant? If I can USD (My Pocket) -> USD (My Brokerage) -> Gold (My Brokerage) -> Gold (My Pocket), then whats the difference other than a few extra steps?"

The difference is that we never tested to see if the USD is actually backed by real gold.

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