Tether price manipulation • Hacker News Board

Re: Tether price manipulation

#301

Post by qeternity » Fri, Jan 08, 2021, 5:32 PM UTC

sekai wrote: post #250

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. Kraken, Bitstamp, did so for 3 years+

And I wonder why Bitstamp, a fairly legitimate shop, stopped using Tether...

Re: Tether price manipulation

#302

Post by nathansmith2017 » Fri, Jan 08, 2021, 5:33 PM UTC

So, lets assume this is price manipulation is true. If they print tether, and buy BTC/USDT on an exchange than someone else has to go long the other side (USDT/BTC). When 600 mil of USDT was printed and was used to purchase 600 mil of BTC/USDT, then who purchased 600 mil USDT/BTC.

It doesn't make sense that people who want to cash out of BTC at a certain price level will cash out through USDT because there is no exchange to redeem USDT to USD directly. You have to cash out through USD/BTC or USD/ETH.

There are arbs traders who maintain the peg the USD/USDT, but arbs traders will always attempt to have a net 0 position, it doesn't make sense for them to hold tether either. Defi flash loans like AAVE and byz offer 0 collateral loans. If they are not using flash loans, then they will post collateral with USD (as this is presumably how they want profits) to short whatever ticker they need to short for the arb play.

If bitfinex and tether keep printing tether, someone is holding all this tether. A lot of this is probably held in defi liquidity pools and AMM pools, but the total reserves in these exchanges (Compound, curve, dydx...) is far less than the 600 million printed.

Perhaps the same institutions printing are the last holders, but Why would tether and bifinex hold their tether if it is truly a scam? I am confused as to who the last holders of tether are, if people are swapping tether for BTC and BTC for USD. Most people that buy tether (other than people supplying liquidity pools) do so to swap to another token for a real potential of gains, since Tether will never gain in value significantly with a 1:1 peg.

Re: Tether price manipulation

#303

Post by [deleted] » Fri, Jan 08, 2021, 5:36 PM UTC

dylkil wrote: post #166

gruez wrote: post #143

Earlier quoted context omitted.

I think the scaling limitations were well known at the beginning. If Bitcoin were to get as large as visa/mastercard the blockchain would be growing at a rate of a few gigabytes per day, which would kill decentralization.

the limitations have been researched extensively outside of the echo chamber of bitcoin development. It is possible to scale a utxo system like bitcoins to hundreds of millions of txs per day. Xthinner[1] can compress blocksizes by 99%, but bitcoin devs have ignored this with handywavy arguments. [1] https://github.com/jtoomim/xthinner-spec

[deleted]

Re: Tether price manipulation

#304

Post by qeternity » Fri, Jan 08, 2021, 5:42 PM UTC

gruez wrote: post #283

qeternity wrote: post #179

Earlier quoted context omitted.

Because the mechanism to transmit USDT to USD doesn't exist. Tether has never demonstrated a single USDT redemption. All of the trading on an exchange doesn't matter because on USDT exchanges, you never actually have USD. If you trade USDT/USD on Binance, your profits are still actually USDT denominated! There is no proven way to convert USDT to USD except via another crypto (i.e. Binance USDT -> BTC and then Coinbas…

>Tether has never demonstrated a single USDT redemption Does that matter when you can withdraw from a USDT exchange and get USD in a bank account, or trade USDT for USD at kraken?

Yes - none of this proves that Tether has any reserves.

It just proves that someone else believes they do...which we already know.

Re: Tether price manipulation

#305

Post by jayd16 » Fri, Jan 08, 2021, 5:43 PM UTC

shuntress wrote: post #69

Triv888 wrote: post #59

Earlier quoted context omitted.

They can buy BTC with the newly minted coins.

This makes zero sense. Why not just use USD? The entire point of Tether seems to be that it is always valued to be exactly 1:1 with USD. And that seems to somehow convince people that entities who cannot obtain a loan of USD can obtain a loan of Tether?

It really comes down to what kind of loans Tether has accepted. They haven't disclosed this information.

If Tether gave out a significant amount of USDT for Bitcoin without backing it in some other way, it means Tether isn't actually backed by the USD. Even if they lent out Tether for USD, they might have used BTC as collateral/risk assessment.

The fear is that Thether is held up by a loan of BTC and BTC is held up by in some part by the stability of Tether.

Re: Tether price manipulation

#306

Post by suikadayo » Fri, Jan 08, 2021, 5:45 PM UTC

I've said it before and I'll say it again:

It’s mysterious how Bitcoiners hate the Fed printing money but they get awfully quiet with Tether printing money when it helps prop up the price.

Re: Tether price manipulation

#307

Post by CyberDildonics » Fri, Jan 08, 2021, 5:45 PM UTC

gruez wrote: post #143

samvher wrote: post #120

Earlier quoted context omitted.

That may be true but there is definitely a difference between the way people talked about it earlier ("later we will all be paying with bitcoin") to how it is now ("it's a store of value and maybe there is potential for bitcoin-backed currencies").

I think the scaling limitations were well known at the beginning. If Bitcoin were to get as large as visa/mastercard the blockchain would be growing at a rate of a few gigabytes per day, which would kill decentralization.

Not this again. The entire bitcoin blockchain fits in $6 of hard drive space. The average transaction right now is more than $11.50. The AVERAGE transaction costs almost double what it costs to store the ENTIRE blockchain.

Stop with the storage space nonsense. The only people even storing the entire chain are enthusiasts, servers and miners. Saying "what if it gets a thousand times as many transactions" is ridiculous, but it still wouldn't be a problem. A few gigabytes a day? A $300 dollar hard drive would still take a decade to fill up. I think the few that sync the entire chain handle that.

Re: Tether price manipulation

#308

Post by doggosphere » Fri, Jan 08, 2021, 5:45 PM UTC

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…

However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation.

The killer app is decentralized, permissionless, open source, and censorship resistant network.

Bitcoin's narrative has had to morph from "digital currency" to "digital gold".

Gold morphed from worthless rocks in the the ground, to coins traded by traveling merchants, to stores of value that were eventually centralized and monopolized by governments.

RE: Tether I don't trust them either, but we need more evidence of this alleged printing. We saw that they did remove the 1:1 peg briefly when Crypto Capital in Panama (?) froze a few hundred million of their USD.

Bitcoin now finds itself a high tech manifestation of the very thing that Satoshi sought to address.

Bitcoin is sound. The centralized exchange layer built on top of it is dirty.

Re: Tether price manipulation

#309

Post by ac29 » Fri, Jan 08, 2021, 5:46 PM UTC

beaned wrote: post #226

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…

How do you square this with the observation that other fiat-backed stablecoins like USDC, which are obviously legitimate, are also printing massively? It would seem to me that if transparent stablecoins with utility are going up, the simplest explanation for tether going up is that it serves the same role for people who have either become accustomed to it from its earlier availability, or have it as their only option…

The argument isnt that there are no legitimate inflows of other stablecoins (or traditional fiat currency) into bitcoin prices. The problem is that Tether is ~80% of inflows [1], and is dubiously backed at best. If 80% of the price support disappears, prices will fall, and legitimate buy side interest from other stablecoins or fiat will almost certainly shrink as well.

[1] https://twitter.com/JacobOracle/status/1346133087877537792/p...

Re: Tether price manipulation

#310

Post by gruez » Fri, Jan 08, 2021, 5:47 PM UTC

qeternity wrote: post #304

gruez wrote: post #283

Earlier quoted context omitted.

>Tether has never demonstrated a single USDT redemption Does that matter when you can withdraw from a USDT exchange and get USD in a bank account, or trade USDT for USD at kraken?

Yes - none of this proves that Tether has any reserves. It just proves that someone else believes they do...which we already know.

This is moving the goalposts. I don't think anyone thinks tether has full reserves. They literally admitted that they don't[1]. However your original claim of "you can't redeem USDT" is misleading at best.

[1] wikipedia: "On 30 April 2019 Tether Limited's lawyer claimed that each tether was backed by only $0.74 in cash and cash equivalents"