Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tether price manipulation

twitter.com

Post reply on HN
Print view View original

201–210 of 490 posts

Re: Tether price manipulation

#201

Post by csomar »

OP gives no proof that Tether is not holding 1:1 reserves. There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. Bitcoin price dropped to $4.000 last year and Tether exchange rate has held pretty well. It is important to mention that USDT is still liquid despite the lack of USD on/off-ramps. People regularly sell USDT on the offline market, and can exchange to USDC on many exchanges.

> But Tether is printing so much money.

So is USDC, and the price of Bitcoin is going higher. This means Bitcoiners have lots of value in Bitcoin and some of them are going to convert that value to USD. They are mainly using USDT for that, for whatever reason.

> Tether printing press is driving Bitcoin price.

Wrong. My proof for that is "where is the premium to buy Bitcoin". In a very liquid market (which for the most part, crypto is), prices should be the same up to the costs (transaction and banking fees). Prices have been higher in Coinbase during this run. As I am typing right now, Coinbase prices are 50-80 dollars higher for Bitcoin. GBTC is even more ridiculous with 10-15% premium on price (but also GBTC is less liquid/arb-able). This signifies that demand is coming from US retail and institutional investors.

> Tether is holding USD as securities/derivatives/whatever.

All of them are. See: https://omarabid.com/usd-stable-coins

Re: Tether price manipulation

#202

Post by qeternity »

gthaman wrote: post #188
qeternity wrote: post #178

Earlier quoted context omitted.

Backed by nothing...as opposed to bitcoin? People who repeat this don't understand that fiat money is based on trust...and that is not a bad thing. This is why blockchain is fundamentally stunted: the global society is based on trust and cooperation. Trustless systems will never be able to compete in these arenas.

yawn speaking of jumping the shark, have you seen what governments have been up to lately ? interest rates at a 5,000 year low, moral hazard abound & global fiat collapse imminent in the best case and in the worst case we have banks/elites/governments who are going to be looking to further enslave those in debt and forced out of business/work with some dystopian debt forgiveness scheme involving a 'vaccine' schedule…

1) trying to distract the above problems by pointing out other issues doesn't make them go away

2) you talk about fiat collapse being imminent...USDT is worth far less than any fiat (see: nothing) I don't get how these ardent fiat haters don't see their entire ecosystem has been coopted by something that has infinitely less value than the thing they so despise

Re: Tether price manipulation

#203

Post by paulgb »

fuzzylightbulb wrote: post #191
JohnJamesRambo wrote: post #119

Earlier quoted context omitted.

The killer app for Bitcoin is escaping government fiat money that is backed by literally nothing at all and is being printed at increasingly alarming rates. 40% of all USD ever created were “made” in 2020. That will have repercussions for decades and isn’t a currency I want to stay in. https://fred.stlouisfed.org/series/M1 Ironically (or not) Bitcoin was created in 2009 right when that graph gets really crazy.

> backed by literally nothing It is the only thing the government accepts for tax payments. Given that you can be arrested for not paying your taxes it is "backed" by the barrel of a gun, a threat to your very being. In one sense this is the only real thing there is.

Indeed. A thought experiment: say the US government created a USD-prime currency that floated freely from USD. You could still use the USD in private transactions, but the US government would only transact and tax in USD-prime. What would be the fate of the original USD?

My belief that it would go to zero. I’m curious whether “fiat is backed by nothing” proponents would disagree.

Re: Tether price manipulation

#204

Post by mockery »

gthaman wrote: post #188
qeternity wrote: post #178

Earlier quoted context omitted.

Backed by nothing...as opposed to bitcoin? People who repeat this don't understand that fiat money is based on trust...and that is not a bad thing. This is why blockchain is fundamentally stunted: the global society is based on trust and cooperation. Trustless systems will never be able to compete in these arenas.

yawn speaking of jumping the shark, have you seen what governments have been up to lately ? interest rates at a 5,000 year low, moral hazard abound & global fiat collapse imminent in the best case and in the worst case we have banks/elites/governments who are going to be looking to further enslave those in debt and forced out of business/work with some dystopian debt forgiveness scheme involving a 'vaccine' schedule…

Seems to me like you're tacitly agreeing with GP here - you're just making a claim about which currency system you trust more! (And attempting to convince others of the same position.)

Re: Tether price manipulation

#205

Post by chalst »

JohnJamesRambo wrote: post #119
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 killer app for Bitcoin is escaping government fiat money that is backed by literally nothing at all and is being printed at increasingly alarming rates. 40% of all USD ever created were “made” in 2020. That will have repercussions for decades and isn’t a currency I want to stay in. https://fred.stlouisfed.org/series/M1 Ironically (or not) Bitcoin was created in 2009 right when that graph gets really crazy.

The 40% relates essentially to cash-like assets, which is a tiny part of the total USD money supply. The total has not grown drastically.

See https://en.m.wikipedia.org/wiki/Money_supply

Re: Tether price manipulation

#206

Post by mmcwilliams »

alisonkisk wrote: post #152
eecks wrote: post #118

Earlier quoted context omitted.

Is it illegal to transfer value from person A to person B without the middleman?

In many cases, yes. It's not the "middleman" that is required, but reporting the transaction to the government is.

If avoiding reporting a transaction is the goal does committing the transaction to a public blockchain really bypass this? All activity is pseudonymous and in the clear.

Re: Tether price manipulation

#207

Post by paulgb »

csomar wrote: post #201

OP gives no proof that Tether is not holding 1:1 reserves. There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. Bitcoin price dropped to $4.000 last year and Tether exchange rate has held pretty well. It is important to mention that USDT is still liquid despite the lack of USD on/off-ramps. People regularly sell USDT on the offline market, and can exchange to USDC on many ex…

I mostly agree with your skepticism on USDT driving BTC price, but I disagree with this:

> There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently.

All this proves is that they have something in reserve, not that it is 1:1 backed. Most modern banking operates on a fractional reserve system, but when I take cash out of my bank account I get a cash dollar 1:1 with what they debit my account; they don’t prorate it for the amount of reserve they have.

Re: Tether price manipulation

#208

Post by qeternity »

csomar wrote: post #201

OP gives no proof that Tether is not holding 1:1 reserves. There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. Bitcoin price dropped to $4.000 last year and Tether exchange rate has held pretty well. It is important to mention that USDT is still liquid despite the lack of USD on/off-ramps. People regularly sell USDT on the offline market, and can exchange to USDC on many ex…

> It is important to mention that USDT is still liquid despite the lack of USD on/off-ramps.

USDT is only liquid BECAUSE there is no redemption mechanism (or at least not one that has ever been demonstrated). If Tether came and said "sure we'll redeem these fully backed Tethers for USD 24/7/365" you would quickly find yourself with a liquidity crisis.

Re: Tether price manipulation

#209

Post by FabHK »

dylkil wrote: post #164
tromp wrote: post #114

Earlier quoted context omitted.

As explained by blockstream co-founder Greg Maxwell in [1], the blocksize is constrained in order to ensure a steady backlog of fee paying transactions, that allow bitcoin to remain secure in the long term when block subsidy becomes insignificant. [1] https://bitcointalk.org/index.php?topic=5306354.0

>that allow bitcoin to remain secure in the long term when block subsidy becomes insignificant. this line of reasoning is silly. To match the current block subsidy with the current block size limit when miner subsidy runs out the average transaction fee will need to be >$127. $45mil daily revenue / 350,000 txs per day OR, you could increase the block size limit to 10mb, allowing 3.5mil txs per day, or 100mb allowing…

> when miner subsidy runs out the average transaction fee will need to be >$127.

Stein's Law:

"If something cannot go on forever, it will stop."

https://en.wikipedia.org/wiki/Herbert_Stein#Stein's_Law

Re: Tether price manipulation

#210

Post by safog »

csomar wrote: post #201

OP gives no proof that Tether is not holding 1:1 reserves. There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. Bitcoin price dropped to $4.000 last year and Tether exchange rate has held pretty well. It is important to mention that USDT is still liquid despite the lack of USD on/off-ramps. People regularly sell USDT on the offline market, and can exchange to USDC on many ex…

There's a lot of bots doing arbitrage between exchanges though. If one diverges significantly from the other, the bots will eat up the difference, I don't think you can make any claims about where the demand is coming from based on this?
Post reply on HN