Are pixie fairies behind Bitcoin's latest bubble? • Hacker News Board

Re: Are pixie fairies behind Bitcoin's latest bubble?

#31

Post by raziel2701 » Mon, Nov 23, 2020, 2:09 AM UTC

marcell wrote: post #26

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.

Tether Limited has never substantiated their claim of full-backing through a promised audit of their currency reserves.

"Trust me I'm fully backed, give me your money for tether" reeks powerfully of a scam to me.

I think the criticisms towards tether are fully substantiated given their lack of transparency.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#32

Post by smabie » Mon, Nov 23, 2020, 2:10 AM UTC

amycastor wrote: post #6

seppel wrote: post #2

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…

Print tether, buy bitcoin, sell bitcoin for real money. Day traders use tether to slip in and out of positions in a volatile market. Unregulated exchanges use tethers in place of real dollars.

More likely (most definitely), they are using tether as collateral for their futures positions. It's not capital efficient to trade spot in most cases.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#33

Post by klipt » Mon, Nov 23, 2020, 2:14 AM UTC

alexmingoia wrote: post #28

Ah yes, Tether is bad because it’s printed money used to push up asset prices. Good thing none of the world’s currencies are printed money.

If you want to give me USD in exchange for a currency I can print I'll gladly take that deal. I can stick your USD in a savings account and get interest for free.

Not sure what the advantage is to you though.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#34

Post by arcticbull » Mon, Nov 23, 2020, 2:15 AM UTC

seppel wrote: post #2

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…

Here's a study that performs analysis showing that tether prints the coins and someone at bitfinex uses them to buy BTC at optimal points to support it's price.

https://onlinelibrary.wiley.com/doi/full/10.1111/jofi.12903

Re: Are pixie fairies behind Bitcoin's latest bubble?

#35

Post by arcticbull » Mon, Nov 23, 2020, 2:18 AM UTC

rabf wrote: post #24

howlgarnish wrote: post #21

Earlier quoted context omitted.

But they are not backed by real USD, and Tether themselves have admitted as much: their FAQ now states simply that it's backed up by "Tether's reserves", which apparently consist of other cryptocurrencies.

Please link your sources, their reserves as I understand may in some part consist of unspecified collateral, even if they are crypto which I seriously doubt due to its volatility the fact remains that Tether is trusted enough to be supported by the majority of major exchanges. The imminent demise of tether has been predicted for many years now. You can short tether at Kraken or choose to use one of the many other USD…

Never short crypto it's a rigged casino, first of all. Second, the fact tether is trusted and used by exchanges is more out of necessity than desire. They would die if they had to ask their so called customers to verify their identities and so both sides look the other way and pretend in a classic emperor has no clothes situation. I'm sure the tether based exchanges are squirming in their pants as tether prints another 2 billion fun bucks per month.

Unless of course you have a theory about where an institution without a banking relationship, let alone an American banking relationship is storing just shy of twenty billion dollars US? And why legitimate investors are plowing two billion dollars per month into this scheme instead of putting it somewhere with audits and regulation like gemini or coinbase.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#36

Post by 35fbe7d3d5b9 » Mon, Nov 23, 2020, 2:19 AM UTC

alexmingoia wrote: post #28

Ah yes, Tether is bad because it’s printed money used to push up asset prices. Good thing none of the world’s currencies are printed money.

Might makes right with global financial markets: the US dollar is the world's reserve currency because the US will grind your country into paste if it needs to protect the supremacy of the USD.

Tether doesn't get to print currency. If Tether doesn't like it, too bad. Tether can get an aircraft carrier or a nuclear arsenal then we can talk.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#37

Post by mantap » Mon, Nov 23, 2020, 2:22 AM UTC

Nursie wrote: post #29

alexmingoia wrote: post #28

Ah yes, Tether is bad because it’s printed money used to push up asset prices. Good thing none of the world’s currencies are printed money.

The point it it's not supposed to be. You know, because people wanted to opt out of that sort of system, where governments can manipulate money supply, into a peer-to-peer system that was free of manipulation and that sort of money printing? Instead they've opted into a system where a small group operate the printer for their own ends, with no oversight.

Tether is meant to be pegged to the dollar. It is supposed to be printed in high quantities if high quantities of tethers are necessary to maintain the peg. Otherwise the peg would break and one tether would be worth more than one dollar.

Am I just being thick? It seems like the article has cause and effect the wrong way around. Demand for bitcoin would be expected to drive creation of tethers not the other way around.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#38

Post by qeternity » Mon, Nov 23, 2020, 2:23 AM UTC

dcolkitt wrote: post #18

zaroth wrote: post #9

Earlier quoted context omitted.

I have the same question. The only answer I can think of, is people that want to get out of Bitcoin but aren’t able to sell for real USD because of AML / tax purposes. Even if the tether is only worth $0.70 it’s still a better deal for some people who can’t exit their BTC position legally. It still doesn’t really explain who is holding almost $20 billion of Tether though.

I've been doing some small-scale arbitrage trading in Uniswap and other Defi exchanges. As part of that I hold a fair bit of Tether, USDC and other stable coins. The reason being is that I want to keep my capital pegged to the dollar, but need something that's native to the Ethereum blockchain. If there's a trading opportunity, I need the ability to swap Tether for [X] token in a single blockchain transaction. There'…

It's likely that most/all of that stablecoin was amassed by selling other crypto, which is zero sum. It's extremely unlikely that people took fiat currencies, and bought USDT directly from Tether, which is what they claim is happening.

No sane person would hold USDT over USD.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#39

Post by qeternity » Mon, Nov 23, 2020, 2:26 AM UTC

marcell wrote: post #26

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.

Re: Are pixie fairies behind Bitcoin's latest bubble?

#40

Post by inquirerofsorts » Mon, Nov 23, 2020, 2:27 AM UTC

seppel wrote: post #2

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…

Tether is literally a short on bitcoin that is quick and cheap to transact in, it is keeping the price down rather than up. There's only 21 million bitcoins, but there's infinite tether. People really need to take a step back from mindlessly repeating things and think about what that actually means.

Go do a search of "tether site:news.ycombinator.com" to see how laughably wrong HN has been for the last 4 years on this subject. The adherents simply refuse to give up and many still identify with this "conspiracy"

I'm not sure we have enough eggs for the number of faces.