That explains why SBF is so sheepishly shilling Tether...
Who or what is SBF?
Sam bankman-fried, creator of the FTX exchange.
Tether minted most USDT to just 2 firms – Alameda and Cumberland
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Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#72I'm no Tether apologist, but this doesn't seem like an issue to me?
Alameda and Cumberland are the 2 biggest liquidity providers in crypto trading. Tether is the source of liquidity for many of the exchanges that they trade on. So of course they'd use Tether to on-ramp into the crypto ecosystem and trade.
I suppose the real news here is that Alameda and Cumberland haven't redeemed much Tether (proportionally), so if Tether collapses, it could blow them up?
Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#73Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#74Earlier quoted context omitted.
And a very large chunk of BTC’s value has come from Tether buys.
Source?
“This paper investigates whether Tether, a digital currency pegged to the U.S. dollar, influenced Bitcoin and other cryptocurrency prices during the 2017 boom. Using algorithms to analyze blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. The flow is attributable to one entity, clusters below round prices, induces asymmetric autocorrelations in Bitcoin, and suggests insufficient Tether reserves before month-ends. Rather than demand from cash investors, these patterns are most consistent with the supply-based hypothesis of unbacked digital money inflating cryptocurrency prices.”
Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#75Earlier quoted context omitted.
The thing is tether is pegged. I think the point you're missing here is that there is no logical basis for the "pegging". It's pegged because crypto exchanges play along with the pegging fantasy.
Well it’s supposed to be pegged to the dollar by maintaining USD deposits. Nothing here or that I’ve yet seen indicated that hasn’t been happening. Banks are worse anyway, all banks function on fractional reserve, but we don’t immediately call them scams.
Fractional reserve refers to liquid cash, vs stuff the banks lend back out, but that doesn't mean bank balance sheets don't have to balance out in terms of assets and liabilities.
You can't just declare yourself a bank and turn a million dollars into ten million dollars, say.
Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#76If it wasn't obvious from the get go that Tether was a scam, what more do you need.
How is minting to a few companies proof of fraud?
Because we know that Alameda and Cumberland do not, on the whole, possess $63 trillion in USD. That's the official number of "outstanding Tether" posted on the Tether website [0]. If these allegations are true, the other holders of Tether total a couple million, meaning Alameda and Cumberland together must have trillions of holdings. Which, based on filings, we know isn't what they're reporting.
Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#77I often find the headlines, and even stories about, crypto to be inscrutable to those looking in from the outside. The stories also seem to come from an ecosystem of sites I don't recognize so it's hard to even judge if it's reputable site (or at least guess at the biases it might have). None of this is inherently bad, but there seems to be a growing divide between "mainstream" tech and the crypto world that is harde…
I've recently started listening to a lot of podcast episodes on the subject (primarily Unchained and a16z) which has been great for raising my general awareness of what's going on. I'm very skeptical of 90% of what I hear and I've limited interest getting involved in the industry right now but crypto is hugely impactful no matter how you look at it so it's worth keeping a decent amount of curiosity in my opinion. ---…
i'd be very sceptical of what a16z published about crypto topics; they are heavily invested both financially and reputationally.
their whole game was/is leveraging their clout to give credibility to the scene, therefore increasing the value of their investments.
Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#78Earlier quoted context omitted.
It doesn't end there. Slightly less obvious is the fact that Tether and other "Stable coins" are the only "stability" that exists in the crypto marketplace. More than half of all crypto trades involve stable coins. And exchanges play along (wittingly or not) with the ruse for their own benefit. So if Tether is a scam, so is bitcoin and the entire crypto marketplace.
USDC has been audited and it's solid. I know of people in large banks who are working with USDC and they've vouched for it being 100% ok.
Anyone who works at a large bank and says any investment (let alone crypto!) is “100% ok” should be fired. That’s day one stuff.
Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland
#79There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?
You can buy stablecoin at the exchange you prefer (because it has low fees or supports your preferred payment method).
Then you can transfer them to other exchanges and buy crypto there. Works the other way too. You can optimize your trading and withdrawal fees this way. So very mediocre utility.
The only entity the stable coins are most wonderful deal is the the one that emits them. They basically have money printing machine for the crypto-economy. And if the project tanks they are left with hard money in hand and everybody else ends up with now worthless stablecoin, because the only source of it's value and utility was the stability.
Some stable coins like DAI have bit more indirect mechanisms of attaching their price to dollar. This seem to work and managed to keep DAI value stable without any manual intervention while ETH price (which is involved in control mechanisms) swung wildly.