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Tether price manipulation

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Re: Tether price manipulation

#281

Post by FabHK »

marcandre wrote: post #251
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…

Kraken.com has an actual USDT/USD pair you can trade and use actual hard currency.

Yes, you can trade them there. However, there is no mechanism imposed by Kraken to keep the price close to 1. It is purely supply and demand. Nothing prevents the price of USDT from collapsing (apart from arbitrage predicated on exchanging USDT back into USD).

Re: Tether price manipulation

#282

Post by Slikey »

jpmattia wrote: post #270

The twitter thread is utterly fatuous, and another post this morning on reddit laid it out pretty well: > This is just dumb but I'll lay it out anyway: The NY AG issued the first Tether subpoena in Dec 2017. The AG got the financial info, found that tether was fully backed by dollars, and that the Tether company lent some of those dollars to the Bitfinex company, which is the basis of the NY AG lawsuit. Bitfinex has…

> Dec 2017

I am fairly certain over 3 years passed since then.

Re: Tether price manipulation

#283

Post by gruez »

qeternity wrote: post #179
dmichulke wrote: post #102

Earlier quoted context omitted.

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…

Because the mechanism to transmit USDT to USD doesn't exist. Tether has never demonstrated a single USDT redemption. All of the trading on an exchange doesn't matter because on USDT exchanges, you never actually have USD. If you trade USDT/USD on Binance, your profits are still actually USDT denominated! There is no proven way to convert USDT to USD except via another crypto (i.e. Binance USDT -> BTC and then Coinbas…

>Tether has never demonstrated a single USDT redemption

Does that matter when you can withdraw from a USDT exchange and get USD in a bank account, or trade USDT for USD at kraken?

Re: Tether price manipulation

#284

Post by gruez »

qeternity wrote: post #195
dmichulke wrote: post #180

Earlier quoted context omitted.

When central banks peg their currencies to others, that means they buy the foreign currency if their own currency is overvalued in comparison, or sell foreign currency to buy local curerncy in the case of undervaluation. You say that a peg breaks if the Central Bank doesn't have the exchange reserves anymore to uphold a peg. Where does Bitfinex take the money from to buy tether to prevent it from devaluing? Alternati…

You're missing the entire premise: where can I go sell my USDT directly for USD? Show me where. Unlike your example where this an existing market that a peg has to be supported, there simply isn't a fungible USDT/USD market.

> You're missing the entire premise: where can I go sell my USDT directly for USD? Show me where.

https://trade.kraken.com/charts/KRAKEN:USDT-USD

Re: Tether price manipulation

#285

Post by freewilly1040 »

chaostheory wrote: post #263
njarboe wrote: post #241

Earlier quoted context omitted.

Gold and silver became money for similar reasons (probably). Kings and Emperors found that supplying their armies was much easier (especially in peace time) if they used the method of taxing the population in gold and/or silver and then using that to pay their soldiers who would supply themselves on the open market. That way you did not have the standard problems of a planned economy. The peasants have now need for g…

Maybe they didn't have any intrinsic value in the past besides looking pretty but in the modern era both gold and silver have industrial uses. They are not just stores of value. One could also argue that both metals also had intrinsic value in the past since both metals were used in jewelry and various items to make them look good.

The industrial usefulness is an irrelevant byproduct when considering gold and silver as an investment.

Put another way, if people lost faith in gold as an investment tomorrow, and the value fell to the economic value of the industrial use cases, investors in gold would be ruined.

Re: Tether price manipulation

#286

Post by gillesjacobs »

Slikey wrote: post #274
gillesjacobs wrote: post #167

Earlier quoted context omitted.

> 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.

US legislators are indeed talking stablecoin restrictions because of this.

Re: Tether price manipulation

#287

Post by jpmattia »

Slikey wrote: post #282
jpmattia wrote: post #270

The twitter thread is utterly fatuous, and another post this morning on reddit laid it out pretty well: > This is just dumb but I'll lay it out anyway: The NY AG issued the first Tether subpoena in Dec 2017. The AG got the financial info, found that tether was fully backed by dollars, and that the Tether company lent some of those dollars to the Bitfinex company, which is the basis of the NY AG lawsuit. Bitfinex has…

> Dec 2017 I am fairly certain over 3 years passed since then.

Yes, I think that was their point: To suggest that the NYAG got the financial info and has waited more than 3 years to shut down an unbacked ponzi scheme is just tinfoil-hattery.

Re: Tether price manipulation

#288

Post by gillesjacobs »

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.

Is there any proof or data on Tether issuance preceding rallies? Because I have seen this claim often made on Twitter, but never with any sources.

I personally dislike Tether and avoid it, but strong claims require strong evidence.

Re: Tether price manipulation

#289

Post by birdyrooster »

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…

It’s digital gold you can use to magically transport any drug to your doorstep. That’s an amazing killer app.

Re: Tether price manipulation

#290

Post by wskinner »

When the Bitfinex’d posts came out in 2017, I found them fairly convincing. It seems likely there is something not quite right at Bitfinex and Tether. But I have yet to see any evidence that the scale of “not right” is so large as is frequently claimed. These critiques never seem to address the most parsimonious explanation for periods of increased Tether issuance, which is that they are driven by genuine demand for bitcoin, and much of that demand is routed via Tether.

There is ample evidence of the sketchiness of the people behind Bitfinex. But there is also a simple explanation for the behavior of bitcoin and Tether in 202 that involves no conspiracies. Many hodlers bought during the March crash because they saw it as an opportunity to buy at a discount (I am one of these people). The crash coincided with events that should drive up the price of bitcoin over the longer term. Specifically, the creation of trillions of new dollars and what many saw as a new era of much looser monetary and fiscal policy. The idea that demand for hard currencies is increased is totally consistent with this.

Compared to 2017, I now believe there is a smaller chance of total tether insolvency and a larger chance of significant but not catastrophic shenanigans.

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