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Tether price manipulation

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Re: Tether price manipulation

#291

Post by user-the-name »

shuntress wrote: post #56
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…

>Bitcoin's narrative has had to morph from "digital currency" to "digital gold" The narrative around bitcoin has always been "It is digital currency. It works like gold". Hence the notion of "mining" . EDIT: downvote me if you want but you are flat wrong Section 6 in the bitcoin whitepaper explicitly likens bitcoin to gold [0] > The steady addition of a constant of amount of new coins is analogous to gold miners expe…

> The narrative around bitcoin has always been "It is digital currency. It works like gold".

It has not been that for years. It failed miserably as a currency, and the current narrative is that it is a "store of value".

Re: Tether price manipulation

#292

Post by user-the-name »

csomar wrote: post #258
lukebuehler wrote: post #95

Earlier quoted context omitted.

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).…

Market caps in cryptocurrencies are an entirely nonsensical fiction. They have no real effect on anything.

Look at trade volumes. Tether is massively bigger than bitcoin and ethereum combined.

Re: Tether price manipulation

#293

Post by chaostheory »

freewilly1040 wrote: post #285
chaostheory wrote: post #263

Earlier quoted context omitted.

Maybe they didn't have any intrinsic value in the past besides looking pretty but in the modern era both gold and silver have industrial uses. They are not just stores of value. One could also argue that both metals also had intrinsic value in the past since both metals were used in jewelry and various items to make them look good.

The industrial usefulness is an irrelevant byproduct when considering gold and silver as an investment. Put another way, if people lost faith in gold as an investment tomorrow, and the value fell to the economic value of the industrial use cases, investors in gold would be ruined.

It is not irrelevant if the price is based on anything else besides raw speculation. Gold and silver have always had utility outside of trading.

Re: Tether price manipulation

#294

Post by user-the-name »

nradov wrote: post #279
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 crypto killer app is evading China's currency controls. Pay for mining hardware and electricity in renminbi, transfer cryptocurrency to foreign countries, exchange for convertible fiat hard currency (dollars, euros, etc.).

Worth noting that those dollars and euros come from the people buying bitcoins.

And there is no obvious place for further money to come from once they want to cash back out.

Re: Tether price manipulation

#295

Post by gruez »

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 (or at least not one that has ever been demonstrated).

For the bystanders here, I've made a reply to a comment similar to this in sibling thread: https://news.ycombinator.com/item?id=25686965

Re: Tether price manipulation

#296

Post by leppr »

raesene9 wrote: post #83
leppr wrote: post #49

Earlier quoted context omitted.

Have you considered the fact that "better regulated" might not be an advantage for someone using it as a capital flight tool? A big value proposition of Tether as an on-ramp is its discretion.

Abolutely I have, I also think that regulators in places like the USA are very likely to crack down on any company providing that kind of service :) The most likely threat to Tether as a currency (IMO), is that one or more large countries outlaws its use, and/or decides to prosecute its owners...

Don't put too much hope on that. The only country that would realistically single Tether out to "outlaw" it would be the US. They may do so, but even then they won't be able to stop the redeeming process from taking place abroad. That may mark the beginning of a slow decent, but no threat to current holders of the token IMO.

Re: Tether price manipulation

#297

Post by user-the-name »

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…

> OP gives no proof that Tether is not holding 1:1 reserves.

Other than, you know, they themselves admitting under oath that they did not.

Re: Tether price manipulation

#298

Post by qeternity »

csomar wrote: post #244
qeternity wrote: post #232

Earlier quoted context omitted.

No, trading is not redeeming. The fact that you will buy it from me or swap me USDC does not prove that they have any reserves. So again I ask - how do we have any proof that Tether has the reserves they claim they do?

Somebody will need to take the counter-trade (the arbitrage dude) and unless he can redeem to close the circle, he is going to stop. USDT are redeemable to your bank account if you have a good sizable balance (talking 7-8 figures). You'll get it deposited from some of their offshore shell companies. But you didn't hear it from me :)

No, they don't. There doesn't need to be an arbitrage. If you have 10 USDT and I give you 9.90 USD for that...nothing else needs to happen.

But the degree that this is happening pales massively in comparison to the billions that are sat on exchanges and recycled.

Tether would be the first legitimate billion dollar operation where people have to say things like "but you didn't hear it from me".

Re: Tether price manipulation

#299

Post by qeternity »

sjs382 wrote: post #252
qeternity wrote: post #213

Earlier quoted context omitted.

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?

You can't USD Binance. That's my point.

Re: Tether price manipulation

#300

Post by gruez »

sjs382 wrote: post #252
qeternity wrote: post #213

Earlier quoted context omitted.

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?

There are easier paths, such as:

USDT -> kraken[1] -> USD -> your bank

or even

USDT -> bitfinex[2] -> your bank

[1] https://trade.kraken.com/charts/KRAKEN:USDT-USD

[2] yes they do allow fiat withdraws https://support.bitfinex.com/hc/en-us/articles/213919309-Fia...

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