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Bitfinex and Tether required to end all trading activity with New Yorkers

ag.ny.gov

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Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#231

Post by mumblemumble »

heliodor wrote: post #209
silexia wrote: post #188

Earlier quoted context omitted.

I saw a great comment earlier, "Buying bitcoin to hedge against inflation is like buying lotto tickets to hedge against Apple stock declines."

That makes no sense. Lotto tickets have an expiration date. No value fluctuation over time. At expiry, they're worth X or zero. How is that like Bitcoin?

You're maybe stretching the analogy way beyond what was intended.

The intended analogy, I'm guessing, is that both lottery tickets and BTC seem to be uncorrelated with USD. A good hedge is something that is inversely correlated with the thing you're trying to hedge against.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#232

Post by antonios »

PragmaticPulp wrote: post #31
bronzeage wrote: post #16

I'm waiting patiently for the whole Tether printing scheme to fall and crush to finally purchase Bitcoin / Ether. However I'm not viewing them as inflation hedges so long as Bitfinex / etc. are allowed to continue with their obvious money printing scheme. When most crypto trading volume is traded at trustworthy exchanges which actually hold dollars as much as they say they do, I'll trust $/BTC to be a fair market. It…

Cryptocurrency isn’t the only way to escape USD inflation. Investors have been investing to avoid inflation long before Bitcoin was invented. Investing in virtually any asset other than cash will, almost by definition, shield you from inflation. Inflation is an increase in asset prices, resulted in reduced buying power. You only need to invest in assets (stocks for example) and minimize holdings in cash if your goal…

Cryptocurrency "in general" obviously isn't deflationary, given that one can create a new cryptocurrency with a simple code fork. But Bitcoin is, no?

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#233

Post by FireBeyond »

celticninja wrote: post #66
londons_explore wrote: post #49

Earlier quoted context omitted.

I think I trust ag.ny.gov much more than theblockcrypto.com... It suggests the latter is 100% made up news, possibly with the aim of market manipulation by sentiment bots who will be fooled for a few minutes until humans intervene.

I would also prefer to trust that source, however it is written as a press release. So they write it to make them look as positive as they can and stress the Bitfinex bad points. The blockcrypto article seems to indicate that the accounts were now balanced, but the ag.ny.gov makes no mention of it, which is expected if they are still trying to paint bitfinex as a wrongdoer, but calls into question their impartiality,…

> I would also prefer to trust that source, however it is written as a press release. So they write it to make them look as positive as they can and stress the Bitfinex bad points.

Whereas theblockcrypto is quoting Bitfinex's counsel who is weasel wording over people's understanding of what a "finding" is at law?

> The blockcrypto article seems to indicate that the accounts were now balanced

Given that in 2019, Tether's lifetime holdings were $2.1B and even that was not fully backed, and they're now printing $3.5B a week, I'm intensely curious how they are comfortable drawing that conclusion.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#234

Post by FireBeyond »

arberx wrote: post #82
Clewza313 wrote: post #72

Earlier quoted context omitted.

"Backed by something"! It sounds so reassuring when you phrase it that way.

That was the conclusion of the AG. Case is moot. Tether is definitely sketch, but it’s not this massive money laundering/conspiracy HN thinks it is.

"Partially backed by something" was indeed one of the conclusions of the AG in this limited scope investigation.

Meanwhile, Tether is, was, claiming "Fully backed by USD!". And yet you are acting like the AG was supportive of Tether's claims, "Oh, yes, even the AG says so!"

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#235

Post by redblacktree »

spiralx wrote: post #169
redblacktree wrote: post #152

Earlier quoted context omitted.

> I'm hopeful for a future of monetary pluralism. My big concern about monetary pluralism is what happens to US citizens, when their day-to-day currency stops being used as the reserve currency for the world? I have trouble imagining any way in which that turns out good for me, as someone living and working in the US. Anything you can do to assuage my fears, since you seem to be educated on the matter?

For one the USD is only the largest reserve currency used internationally: GBP, EUR and JPY are also used as reserve currencies. For another the US has been trying to reduce the role of the dollar as a reserve currency because it actually has significant downsides and fewer benefits than is popularly portrayed - this even has it's own term, "exorbitant privilege". Here's Ben Bernanke talking about it: https://www.bro…

Thank you, that was interesting reading. Not sure why you were downvoted.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#236

Post by jcranmer »

CarelessExpert wrote: post #138
PragmaticPulp wrote: post #65

Earlier quoted context omitted.

The world would certainly be a strange and sad place if the best thing for everyone to do with their wealth was hoard it in currency. Not holding wealth in cash has been investing 101 material long before cryptocurrency. It is fascinating how crypto proponents took over that narrative to imply that crypto was the only investment that could escape inflation. They’ve also spread an idea that money printing is the singu…

> They’ve also spread an idea that money printing is the singular source of inflation, which isn’t true at all. Bitcoin, for example, is an inflating asset due to hype-driven demand. Uh, I'm very much of the opinion that your average BTC fan isn't exactly educated about macroeconomics, but this sentence makes absolutely no sense. Inflation isn't a thing that happens to a currency, it's a thing that happens to an econ…

Inflation can happen to assets, and PragmaticPulp is analyzing Bitcoin as an asset, not a currency. Given that even when you buy stuff with BTC, you're buying a product or service denominated in USD, their analysis is generally more correct than arguing that Bitcoin should be analyzed as a currency.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#237

Post by safog »

FireBeyond wrote: post #208
safog wrote: post #187

Earlier quoted context omitted.

I don't think there are any claims that Tether the organization itself is doing anything like that. They just print USDT and send it to people who are interested in buying USDT like exchanges. The two problems as I see them are: - Is USDT actually backed 1:1 by USD / cash equivalents as Tether claims? w/o independent audits we have no idea. So technically, if you hold USDT on an exchange and use it to trade alts and…

> - Is USDT actually backed 1:1 by USD / cash equivalents as Tether claims? w/o independent audits we have no idea. I'm going to say no. Because Tether refuses audit, refuses to name banks, and would be, based on their printing rates, depositing $3.5B USD a week into their bank (a rate which would put them on par with AT&T, Samsung, or Alphabet). I'm not sure how a few people working out of Hong Kong, etc., do that w…

Yes I agree, but still trying to figure out what impact that has on the broader eco system if USDT ends up being worthless starting now. How exactly will it impact the BTC price?

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#238

Post by atleta »

PragmaticPulp wrote: post #65
api wrote: post #48

Earlier quoted context omitted.

> Investing in virtually any asset other than cash will, almost by definition, shield you from inflation. ... which is why virtually every nation on Earth adopted some kind of inflationary fiat currency. It pushes money to be invested, not held. Wealth is a verb, not a noun.

The world would certainly be a strange and sad place if the best thing for everyone to do with their wealth was hoard it in currency. Not holding wealth in cash has been investing 101 material long before cryptocurrency. It is fascinating how crypto proponents took over that narrative to imply that crypto was the only investment that could escape inflation. They’ve also spread an idea that money printing is the singu…

Not only that, but inflation is a feature not a bug. Maybe a bug turned into a feature, but still a feature. Something governments and national banks use to stimulate investment and thus economic growth. Because, as you say, hoarding and holding cash (or cash equivalent) does no good for the world. Even though our instinct is to do just that: secure what we have, secure our future and avoid risks.

The strange thing about this is that it's not some secret knowledge, but something that is being discussed in (front of) e.g. the media constantly.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#239

Post by cool_dude85 »

BelenusMordred wrote: post #222
cool_dude85 wrote: post #107

Earlier quoted context omitted.

Ending redeemability? Can you redeem a tether for a USD today?

Yes, certainly can, right here: https://www.kraken.com/prices/usdt-tether-usd-price-chart/us... You can also short it if you are convinced Tether is going to collapse.

Sorry, trading it for a dollar isn't the same as redeeming it for a dollar.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#240

Post by kragen »

deanmoriarty wrote: post #227
kragen wrote: post #210

Earlier quoted context omitted.

US$5M is a bit under 100 kg of gold or 6 tonnes of silver. Might not be a bad idea to spend a few percent of that on hiring security guards and stocking up on perishables to feed them an their families.

This quickly went downhill lol. Thank you for your suggestion, I’ll stick my $5M in VTWAX and hope for the best.

Probably a good idea to maintain a more diverse asset balance than 100% in stocks, in the interest of hedging wealth preservation against both likely and unlikely shocks. The base rate of state collapse, for example, is about 1% per year, and examination of past episodes shows that it's often pretty unexpected. See notes/pandemic-collapse.html in Derctuo for some of the reasoning here. Moreover it's hardly unusual for share markets to dip 10% or 20% and take several years or a decade to recover.
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