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Despite all predictions to the contrary, the US government is doing quite a lot to legitimize Bitcoin.
For anyone who hasn't been following, the prevailing theory is that the largest Cryptocoin exchange "Bitfinex" also runs an altcoin called "Teather" which was marketed as being backed 1:1 by USD. So far they've created 2.8 BILLION USDT and coincidently the times they create millions of these happens to be in the middle of extreme market crashes. See this chart: https://i.imgur.com/Uo07d1d.jpg More details here: https…
For anyone who hasn't been following, the prevailing theory is that the largest Cryptocoin exchange "Bitfinex" also runs an altcoin called "Teather" which was marketed as being backed 1:1 by USD. So far they've created 2.8 BILLION USDT and coincidently the times they create millions of these happens to be in the middle of extreme market crashes. See this chart: https://i.imgur.com/Uo07d1d.jpg More details here: https…
Don't you have it the wrong way round? The value (in $) of USDT crashes after they create more of it, because they create more of it (i.e. supply increases). I mean, surely it doesn't make sense to increase supply after USDT crashes (and hence depress the value further)?!
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But assuming Tether was legitimate, wouldn't they also need to create new Tether units during extreme market crashes because that's when the highest demand for Tether would be, so they'd run out of the existing Tether? They wouldn't need to create new Tether during bull runs, because nobody cares about putting their money into Tether then.
Day traders use Tether a lot, even during bull runs. Because the market never closes, many full-time traders put their crypto all into tether when they're done trading for the day.
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Don't you have it the wrong way round? The value (in $) of USDT crashes after they create more of it, because they create more of it (i.e. supply increases). I mean, surely it doesn't make sense to increase supply after USDT crashes (and hence depress the value further)?!
If Tether is a scam, they'd care more about the value of Bitcoin and the altcoins being propped up with it (as that's where they'd be actually making their money) than the value of Tether.
Despite all predictions to the contrary, the US government is doing quite a lot to legitimize Bitcoin.
Or, Bitcoin finally got to a place where enough normal retail financial customers are exposed to it that the DOJ can't ignore scams, and by the time the ecosystem is locked down and the get-lambos-quick schemes are foreclosed on, Bitcoin will look about as attractive as it did in 2010.
EDIT:
Also, the number of people to whom btc is attractive is less important than the type of people. It may be that there is never mass adoption of Bitcoin - it is also the case that throughout history most people never had any money at all. And even though most people never had any money, sound money has been extremely valuable nonetheless because most people don't know what to do with money anyway.
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But assuming Tether was legitimate, wouldn't they also need to create new Tether units during extreme market crashes because that's when the highest demand for Tether would be, so they'd run out of the existing Tether? They wouldn't need to create new Tether during bull runs, because nobody cares about putting their money into Tether then.
No, it's unlikely if Tether was legitimate USDT printing would correlate so closely with bitcoin (crypto) market downturns. The reason being, assuming tether is legitimate, for every printing they are sourcing additional USD to back the newly minted USDT. The idea they could so consistently find large investors willing to make NEW 100M+ investments while the crypto markets were in free fall is unlikely to say the lea…
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To be fair almost every financial advisor ever would have told you to stay away from bitcoin because it was an unknown quantity and very high risk. In hindsight everyone of them was wrong if you bought in at any point between 2009 and mid - 2017 and sold in the last 6 - 8 months. Also they have been calling bitcoins death since about 2009 when it was created so I would not put too much faith in those predictions. If…
They would've been right if it was the Zimbabwaean dollar if you bought it in the 80's, or one of Bernie Madoff's financial products. They could still be right, given time. They've been right for Bitcoin Gold, for example. They were right when MtGox crashed.
In one day in Nov 2017 bitcoin went up 15% in early trading then was down 21% later in the day before rebounding to close near even.
Whether bitcoin will be some like long lasting actual useful thing remains to be seen, but one thing that is undeniable is that investing in bitcoin is extremely risky.
This hold true just focusing on the general market behavior alone while ignoring all the issues such as getting money into and out of exchanges and hacks.
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If there was a problem redeeming Tether for USD, you'd expect that the market price distortion of Tether. But it hasn't[1] https://www.tradingview.com/chart/?symbol=POLONIEX:USDTUSD >they've created 2.8 BILLION USDT Absolute numbers are meaningless and less eye catching when they're compared to the entire market. 2.8 ~ ~ Billion ~ ~ USDT is only 0.5%-0.8% of the market. Do you really think that a 300-500 billion doll…
No, not necessarily. Ponzi schemes can survive redemptions for years or even decades; they blow up when there's finally a run.
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No, it's unlikely if Tether was legitimate USDT printing would correlate so closely with bitcoin (crypto) market downturns. The reason being, assuming tether is legitimate, for every printing they are sourcing additional USD to back the newly minted USDT. The idea they could so consistently find large investors willing to make NEW 100M+ investments while the crypto markets were in free fall is unlikely to say the lea…
This is inaccurate. Tether demand INCREASES when the cryptomarkets crash because traders want to escape to non-volatile assets. If everyone converts their crypto to USDT at the same time (which is what happens during big crashes) they MUST print more Tether or the price will increase.
This doesn't make sense.
You don't "convert" other cryptocurrencies to USDT, you sell your cryptocurrencies to people who have USDT. If there's a big sell pressure on the cryptocurrency, people want to move back to dollars, and there are not enough USD(T) then the price of the cryptocurrency should come down.
By adding more USDT to the picture you're magicking up money out of thin air to prop up a price. You're basically saying that when people want to sell cryptocurrency, dollars should be brought into existence to facilitate this at their preferred price.