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Tether price manipulation

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Re: Tether price manipulation

#251

Post by marcandre »

qeternity wrote: post #213
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…

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.

Re: Tether price manipulation

#252

Post by sjs382 »

qeternity wrote: post #213
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…

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…

> For anyone who disagrees with the above - please show me market where I can go sell my USDT directly for USD.

Genuinely curious, as someone who has never used Binance nor USDT:

Why is the "directly" part here significant? If I can USDT (Binance) -> USD (Binance) -> BTC (Binance) -> BTC (Coinbase) -> USD (Coinbase) -> USD (My Bank), then whats the difference other than a few extra steps?

Re: Tether price manipulation

#253

Post by nebulous1 »

qeternity wrote: post #208
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.

> USDT is only liquid BECAUSE there is no redemption mechanism

This isn't necessarily true, as in that event, although possible, wouldn't necessarily have happened. Much like banks with limited liquidity can survive for a long time. To your point, it's confusing how they managed to thrive after admitting that they were lying about being backed 1:1.

Edit: I haven't been paying too much attention to tether in ages. It looks like they're now offering redemption of $100k+ at a minimum of $1000 a pop?

Re: Tether price manipulation

#254

Post by shuckles »

marfusios wrote: post #248
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…

That's gonna be the killer app, low-cost global payments, finally we can accept international payments from non-crypto customers without ridiculous SWIFT or PayPal fees... https://jimmymow.medium.com/announcing-strike-global-2392b90...

Most global payments are transactions, not cash transfers, and the transacting parties have banking relationships that make those transfers low cost and strictly superior to Bitcoin.

Re: Tether price manipulation

#255

Post by coinward »

How about USD price manipulation? How much of the USD being created by the FED is back by their reserves?... Is this scam sustainable? What effect would a Fed collapse have on Bitcoin's price? I'm going to wager that the Fed scam has a far larger impact on the USD price of BTC than this article's claims on tether fraud or collapse and its not even close.

Re: Tether price manipulation

#256

Post by Slartie »

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…

If Tether Ltd. had at any point in time made any significant USDT -> USD redemptions that outweighed the new USDT given out to new buyers, we should have seen that by a significant number of Tethers being destroyed. Looking at the historic Tether market cap on CoinMarketCap - which is practically equal to all non-destroyed tethers due to USDT being pegged to the USD - however does not reveal any significant drop in Tether market cap ever that could be an indication of actual redemptions. And I refuse to believe that in all of Tethers' history, with all of Bitcoins' ups and downs, there has never been a period in which people weren't pulling more money out of the crypto ecosystem than other people were putting fresh money in. I would expect that to be the case in most of the Bitcoin deflation phases.

Re: Tether price manipulation

#257

Post by subb »

Isn't this pretty much the same as taking a loan at a bank and buying bitcoins? Couldn't the "bubble" be explained by extremely low interest rates?

Banks create money out of thin air when you take a loan. The only difference is they destroy that newly created money when you pay the loan back (but keep the interests).

See : https://positivemoney.org/how-money-works/banking-101-video-...

Re: Tether price manipulation

#258

Post by csomar »

lukebuehler wrote: post #95
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…

I’ve been wondering if Tether is really a scam for a long time. In all these analyses, one key point is missing: arbitrage traders have to make up for the sell pressure on USDT when Tethers are being printed and sold for BTC. Can anyone show me how there is a plausible mechanism/scheme/conspiracy that keeps the USD/USDT exchange rate stable while a crazy amount of illegitimate Tethers are being printed? Edit: typo an…

It's just that conspiracy theories and doom stories are nice to write about. USDT market cap is lower than that of GBTC. So it's not possible that USDT is inflating 90% of the price of Bitcoin.

Most people writing about USDT don't understand how arbitrage markets work, and don't understand that liquid markets are quick to resolve themselves (unlike ponzi schemes where you can hide the missing assets for a long time). Liquid markets will put quick pressure which is why these structures collapse faster (see MtGox)

Re: Tether price manipulation

#259

Post by paulgb »

sekai wrote: post #249
paulgb wrote: post #207

Earlier quoted context omitted.

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…

> 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. Now try taking out 50 million or more, you'll face same difficulties. This tether nonsense comes up every few months, still adamantly holding the 1:1. Not mentioning that it's not the single dollar peg option in crypto space anymore, plenty of other options…

> Now try taking out 50 million or more, you'll face same difficulties.

Sure but that’s my point. The fact that my small volume transactions go through without friction is not proof that the system is not fractional reserve. In the case of a (properly run) bank the value still exists but isn’t liquid; in the case of USDT we don’t know without an audit.

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