101–110 of 115 posts
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pretty much. the firm I work at has many millions of tether for this reason (to support the market making bots)
So there is no tether printing scam in the first place? (If there was a scam, I'd love to understand how it works)
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Retail people seeking to get into bitcoin in the middle of this bubble are getting scammed because tether is being used to artificially inflate its value. If tether goes away that would hurt whomever believes it's worth a dollar. The exchanges who are in on the scam can trade tether back to USD if they need to when the tether company sells their bitcoin for a profit. But the exchanges also make a killing from increas…
Sorry, I'm slow and I really don't understand this. > Retail people seeking to get into bitcoin in the middle of this bubble are getting scammed because tether is being used to artificially inflate its value. But how? Let's say I have one BTC. You offer me 15k USD to buy it, I say no. You say, ok, what about 18k USDT (that you just printed)? I reconsider and say, yeah, ok. So you inflated the price ok, but then what…
It doesn't really work like that. It's more like: you see BTC being traded at 15k, and you refused to buy because that's ridiculously high. Two days later, the price pumps to 18k (which is, at least partially, caused by Tether printing). Now FOMO kicks in and you saw a tweet by some rando that says that Bitcoin will breach the ATH and get to 25k for sure due to his TA. You decided to buy in at 18k.
Notice that in this entire thought process, there's no difference between USDT price and USD price. They are considered one and the same, at least in the vast majority of traders, holders, miners and crypto media.
Now, you may have access to USD exchanges like Coinbase, but many people don't. For those, their only FOMO option is USDT exchanges like Bitfinex, which means they need to buy USDT first, which means the Tether ecosystme just got some new cash inflow and someone else got to cash out their USDT.
It's not really important to withdraw USDT directly into my bank account. I can simply move USDT to Binance, convert it to USDC, and then withdraw USDC using my Coinbase account. USDC and USDT trade at basically 1:1, as you can see here: https://www.binance.com/en/trade/USDC_USDT FUD around Tether (like this article) is noise.
What? The fact that the fraud is successful for some non-zero amount of time is not evidence that it's not a fraud. It just evidence that it's a successful one, which is precisely what's being alleged. Enron, WorldCom, et al worked until they didn't.
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It's almost quaint how this December 2019 article talks about "the concern surrounding the creation of large swaths of Tether in 2017", when about $2.5 billion of Tether was issued. In the time since it was published, when Tether had issued about $4.5 billion total, there have been over $14 billion additional Tether, a 4X expansion of the total supply, or 7.5X what was described as "large swaths of Tether" in this ar…
IMO if a few billion is cause for an CFTC investigation then $20B merits an emergency injunction.
I don't really get it (as always if tether is involved). If someone is printing tether to buy bitcoin, then who is selling bitcoin for tether and keeps the tether? I mean, if I had substantial bitcoin, I'd not sell it for tether. Maybe I'd use tether as some intermediate currency, but in the end I'd either buy stocks or real estate or yachts. Or I would keep the BTC. But I would never sell BTC and keep tether. Who do…
My understanding is that tether is printed (by Tether the company) and used to buy btc at just a couple exchanges (one is bitfinex, I forget the others) who are in on it. This initial purchase drives btc-usdt up, arbitrage bots then buy btc-usd so that it matches btc-usdt. The media and people notice the price increase and jump into btc-usd because it's going up, narratives are created to justify why the price went u…
I don't really get it (as always if tether is involved). If someone is printing tether to buy bitcoin, then who is selling bitcoin for tether and keeps the tether? I mean, if I had substantial bitcoin, I'd not sell it for tether. Maybe I'd use tether as some intermediate currency, but in the end I'd either buy stocks or real estate or yachts. Or I would keep the BTC. But I would never sell BTC and keep tether. Who do…
My understanding is that tether is printed (by Tether the company) and used to buy btc at just a couple exchanges (one is bitfinex, I forget the others) who are in on it. This initial purchase drives btc-usdt up, arbitrage bots then buy btc-usd so that it matches btc-usdt. The media and people notice the price increase and jump into btc-usd because it's going up, narratives are created to justify why the price went u…
If the tethers are actually unbacked, then the USDT-USD markets should be dropping hard as arbitrageurs try to unload tether bags.
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Sorry, I'm slow and I really don't understand this. > Retail people seeking to get into bitcoin in the middle of this bubble are getting scammed because tether is being used to artificially inflate its value. But how? Let's say I have one BTC. You offer me 15k USD to buy it, I say no. You say, ok, what about 18k USDT (that you just printed)? I reconsider and say, yeah, ok. So you inflated the price ok, but then what…
So for this to work out I am tether the company, you are an exchange that is in on the scam. So the initial denial of declining 15k USD doesn't even happen. What happens is I print a billion tether and use that to buy a bunch of btc from you. You willingly take tether despite knowing that tether is useless, because you know that this transaction will pump the value of btc and you benefit from that. We both benefit fr…
This is the bit that doesn't make sense.
Arbitrage bots trying to push BTC-USD up to match BTC-USDT will end up holding a lot of USDT. So what do they do with it? You can't just magically make USD markets go up; that needs actual USD to enter the system (as part of the arbitrage process, if nothing else).
Earlier quoted context omitted.
My understanding is that tether is printed (by Tether the company) and used to buy btc at just a couple exchanges (one is bitfinex, I forget the others) who are in on it. This initial purchase drives btc-usdt up, arbitrage bots then buy btc-usd so that it matches btc-usdt. The media and people notice the price increase and jump into btc-usd because it's going up, narratives are created to justify why the price went u…
If arbitrage bots try to arbitrage between BTC-USDT and BTC-USD markets, and the USDT markets are the ones pushing the price up, then it's the arbitrage bots that would end up holding huge amounts of USDT. So what are they doing with it? They should mostly be trying to maintain equal holdings to handle arbitrage, so they would have to sell it on USDT-USD markets (or redeem it from Tether, if that's actually possible)…
Earlier quoted context omitted.
So for this to work out I am tether the company, you are an exchange that is in on the scam. So the initial denial of declining 15k USD doesn't even happen. What happens is I print a billion tether and use that to buy a bunch of btc from you. You willingly take tether despite knowing that tether is useless, because you know that this transaction will pump the value of btc and you benefit from that. We both benefit fr…
> Now, arbitrage bots will look at this in crease in btc-usdt, and be mandated to buy btc with USD so that BTC-USDT and BTC-USD are in parity. This is the bit that doesn't make sense. Arbitrage bots trying to push BTC-USD up to match BTC-USDT will end up holding a lot of USDT. So what do they do with it? You can't just magically make USD markets go up; that needs actual USD to enter the system (as part of the arbitra…
Earlier quoted context omitted.
My understanding is that tether is printed (by Tether the company) and used to buy btc at just a couple exchanges (one is bitfinex, I forget the others) who are in on it. This initial purchase drives btc-usdt up, arbitrage bots then buy btc-usd so that it matches btc-usdt. The media and people notice the price increase and jump into btc-usd because it's going up, narratives are created to justify why the price went u…
If arbitrage bots try to arbitrage between BTC-USDT and BTC-USD markets, and the USDT markets are the ones pushing the price up, then it's the arbitrage bots that would end up holding huge amounts of USDT. So what are they doing with it? They should mostly be trying to maintain equal holdings to handle arbitrage, so they would have to sell it on USDT-USD markets (or redeem it from Tether, if that's actually possible)…
Also, because the order book is pretty thin on most exchanges, it may not take much arbitrage for the USD price to catch up.