Are pixie fairies behind Bitcoin's latest bubble?

#1

Post by amycastor » Sun, Nov 22, 2020, 8:03 PM UTC

Are pixie fairies behind Bitcoin's latest bubble?
amycastor.com

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

#2

Post by seppel » Sun, Nov 22, 2020, 11:13 PM UTC

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 does that and why?

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

#3

Post by randtrain34 » Mon, Nov 23, 2020, 12:14 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…

Despite all its controversy, Tether's technically a stablecoin, so it's should be more stable than Bitcoin, which may be desirable to some people.

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

#4

Post by [deleted] » Mon, Nov 23, 2020, 12:16 AM UTC

[deleted]

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

#5

Post by meowphius » Mon, Nov 23, 2020, 12:33 AM UTC

I'd say paypal[0].

[0]: https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-...

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

#6

Post by amycastor » Mon, Nov 23, 2020, 12:42 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…

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.

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

#7

Post by paulgb » Mon, Nov 23, 2020, 12:47 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.

This doesn't create any net demand for Bitcoin, though, right? It's in one end and out the other.

Or is the theory that Tether is actually backed by Bitcoin, in a sort of circular way that is sustainable as long as the Bitcoin price goes up but would unravel disastrously if the price were to come down?

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

#8

Post by RustyRussell » Mon, Nov 23, 2020, 1:02 AM UTC

It also repeats the standard "mining death spiral" fallacy. In practice, of course, difficulty adjusts downwards if price drop makes some miners stop, making it easier for the remainder.

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

#9

Post by zaroth » Mon, Nov 23, 2020, 1:06 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…

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.

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

#10

Post by seppel » Mon, Nov 23, 2020, 1:11 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.

> Print tether, buy bitcoin, sell bitcoin for real money.

But to buy bitcoin for tether, you first need someone to sell bitcoin for tether. And this guy then has tether. What is he going to do with the tether?

> Day traders use tether to slip in and out of positions in a volatile market. Unregulated exchanges use tethers in place of real dollars.

But day traders close their positions at the end of the day (or at least regularly) so they will not hold tether.