66% of all Tether (USDT) have been printed in the last 6 months(coinmarketcap.com)
coinmarketcap.com
66% of all Tether (USDT) have been printed in the last 6 months
https://coinmarketcap.com/currencies/tether/
78 comments
I thought some US prosecutors were going after Tether? What ever happened to that?
The case is still ongoing (although note it's New York, not the US, that is prosecuting the case). As I understand it, Tether still has yet to provide the documentation requested by the New York Attorney General.
Was suppose to happen in Feb and now it's March =/
Tether/Bitfinex submitted something like 2.5 million documents. Reviewing them and taking a public position takes more than a few days.
Delayed again? Do you have a link?
That’s the Jan extension til Feb. I’m not aware of an extension from Feb to Mar.
Because the dollar supply has also skyrocketed in the same time period.
> Because the dollar supply has also skyrocketed in the same time period.
With the following difference:
USD is backed by guns, tanks, warships and missiles. And some actual tangible assets (a fraction of the mass of USD in circulation).
USDT is backed by a bunch of italian people that are very well-versed in: - the art of engineering financial complications - the art of running when the weather turns bad - a vague, unaudited promise of USD reserves.
Not a good thing.
With the following difference:
USD is backed by guns, tanks, warships and missiles. And some actual tangible assets (a fraction of the mass of USD in circulation).
USDT is backed by a bunch of italian people that are very well-versed in: - the art of engineering financial complications - the art of running when the weather turns bad - a vague, unaudited promise of USD reserves.
Not a good thing.
66% of all dollars were printed in the past six months?
No - M2 increased by 20% in 2020.
There is no connection to USDT issuance. As Michael Saylor, famed Bitcoin bull, says: no institutions and using Tether. Tether are printing it out of thin air.
Bitcoin bulls know this and they rush to hand wave away Tether at every turn.
There is no connection to USDT issuance. As Michael Saylor, famed Bitcoin bull, says: no institutions and using Tether. Tether are printing it out of thin air.
Bitcoin bulls know this and they rush to hand wave away Tether at every turn.
M2 includes "I owe yous" by banks. But USDTs are only the "I owe yous" by the emitter. So a better comparison might be the federal reserve balance sheet:
https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
43% of these "original emitter" dollars have been printed in 2020.
https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
43% of these "original emitter" dollars have been printed in 2020.
No it’s not a better comparison as banks genuinely create money by lending. This is the whole point of FRB.
You can cherry pick your numbers but it doesn’t change the fact that Tether’s reserves likely don’t exist in the way they’re supposed to (cash and cash equivalents).
You can cherry pick your numbers but it doesn’t change the fact that Tether’s reserves likely don’t exist in the way they’re supposed to (cash and cash equivalents).
I don't think it's a better comparison when it comes to how much money is "printed". That's M1, not M2. Fractional reserve banking don't print money, it increases (and decreases) the money supply through lending.
Despite perhaps not being backed properly, Tether is not supposed to be fractional reserve, nor is Tether created through debt.
Despite perhaps not being backed properly, Tether is not supposed to be fractional reserve, nor is Tether created through debt.
> Fractional reserve banking don't print money, it increases (and decreases) the money supply through lending.
Technically the Fed does the same. They lend money to the Treasury by buying Treasuries (or more recently, to other people by buying IG credit). When the Fed prints money, in theory it’s offset by a liability somewhere. They are the same. M2 is what matters.
Technically the Fed does the same. They lend money to the Treasury by buying Treasuries (or more recently, to other people by buying IG credit). When the Fed prints money, in theory it’s offset by a liability somewhere. They are the same. M2 is what matters.
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Is this trying to say that the primary destination of new dollars is cryptocurrency?
It’s trying to imply that the dollar is collapsing and everyone is rushing for the exits, which isn’t true by any other measure.
These arguments are dishonest because they treat Bitcoin as a dual currency/asset but then only compare to the M2 money supply (currency) while ignoring the total wealth of the United States (including assets).
These arguments also confuse quantitative easing with traditional government debt spending, and they ignore that the stimulus money is designed to fill gaps in the economy left by COVID, in which case inflation would be negligible (although I think the US is overshooting that target)
They also ignore the fact that crypto isn’t the only exit for holders of USD looking to avoid inflation. They can invest in stocks or assets (crypto is a narrow subset of this), or they could exchange into the currency of another nation.
These arguments are dishonest because they treat Bitcoin as a dual currency/asset but then only compare to the M2 money supply (currency) while ignoring the total wealth of the United States (including assets).
These arguments also confuse quantitative easing with traditional government debt spending, and they ignore that the stimulus money is designed to fill gaps in the economy left by COVID, in which case inflation would be negligible (although I think the US is overshooting that target)
They also ignore the fact that crypto isn’t the only exit for holders of USD looking to avoid inflation. They can invest in stocks or assets (crypto is a narrow subset of this), or they could exchange into the currency of another nation.
Counter-point: the US government added $2.2T more dollars, yet they are almost as good at buying commodities and other goods and services today as they were a year ago. Furthermore, the market expectation of their goodness, as determined by Treasury Inflation-Protected Securities, is quite strong. That seems like almost the opposite of dollar holders rushing for the exits!
I don't know, but I think the destination is primarily the stock market for the past year. Maybe some also went to bitcoin.
- Fed open market operations: $2.8T introduced over 9 month by the Fed in 2020[1].
- Stock market (DJIA) run-up in 2020: $2.2T [2]
I don't think this can be just correlation, even on the simplest reading of how the Fed OMO works, but there is debate about this[3].
[1] https://fred.stlouisfed.org/series/M1. I believe M1 money is a good proxy for the Fed's open market operations that would go towards the kind of asset purchases that would increase stock equity valuation. I'd appreciate any feedback on this
[2] DJI went from $22k on Mar 1 2020 -> $30k, for an $8k change by end of year. DJI had a market cap of $8.3T when it was at $29k Dec 2019[2.1], so 8/29=0.27. 27% of 8.3T = $2.2T.
[2.1] https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average
[3] https://economics.stackexchange.com/questions/12226/does-the...
- Fed open market operations: $2.8T introduced over 9 month by the Fed in 2020[1].
- Stock market (DJIA) run-up in 2020: $2.2T [2]
I don't think this can be just correlation, even on the simplest reading of how the Fed OMO works, but there is debate about this[3].
[1] https://fred.stlouisfed.org/series/M1. I believe M1 money is a good proxy for the Fed's open market operations that would go towards the kind of asset purchases that would increase stock equity valuation. I'd appreciate any feedback on this
[2] DJI went from $22k on Mar 1 2020 -> $30k, for an $8k change by end of year. DJI had a market cap of $8.3T when it was at $29k Dec 2019[2.1], so 8/29=0.27. 27% of 8.3T = $2.2T.
[2.1] https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average
[3] https://economics.stackexchange.com/questions/12226/does-the...
I'm having trouble following your logic for [2]. Prices are decided on the margin whereas M1 is a metric of total assets, which is a cumulative measure. As a thought exercise: if I owned the entirety of $DJI, and you bought $2.2T of $DJI from me, M1 would be unchanged (your money is now held in deposit at my bank account), and the market cap of $DJI would be determined entirely by our transaction price. By what mechanism do you relate the two?
I mean it in the usual supply/demand sense: more money => higher prices.[1].
The Fed OMO directly drives prices level/inflation. Look at the series below... the 10 year break even inflation rate[2] looks almost exactly like the stock market since the crash, but they weren't in sync before. Ofc, it's primarily being used to shore up the value of the 10-Year Treasury Constant Maturity Rate bond [3], which would otherwise look like [4]. But I think the money supply pressure effects both, and the relative quantities are on par, so seems like the pieces fit to me.
[1] https://www.investopedia.com/insights/what-is-the-quantity-t...
[2] 10-Year Breakeven Inflation Rate: https://fred.stlouisfed.org/series/T10YIE [3] 10-Year Treasury Inflation-Indexed Security, Constant Maturity: https://fred.stlouisfed.org/series/DFII10 [4] 10-Year Treasury Constant Maturity Rate: https://fred.stlouisfed.org/series/DGS10
The Fed OMO directly drives prices level/inflation. Look at the series below... the 10 year break even inflation rate[2] looks almost exactly like the stock market since the crash, but they weren't in sync before. Ofc, it's primarily being used to shore up the value of the 10-Year Treasury Constant Maturity Rate bond [3], which would otherwise look like [4]. But I think the money supply pressure effects both, and the relative quantities are on par, so seems like the pieces fit to me.
[1] https://www.investopedia.com/insights/what-is-the-quantity-t...
[2] 10-Year Breakeven Inflation Rate: https://fred.stlouisfed.org/series/T10YIE [3] 10-Year Treasury Inflation-Indexed Security, Constant Maturity: https://fred.stlouisfed.org/series/DFII10 [4] 10-Year Treasury Constant Maturity Rate: https://fred.stlouisfed.org/series/DGS10
I am absolutely befuddled. Why are we letting this happen? Who is holding this hot potato and why?
Drop tether now. The more people hold it, the more damage it will do when it implodes.
Drop tether now. The more people hold it, the more damage it will do when it implodes.
In finance, no one complains about flawed schemes as long as everyone thinks they’re making money.
Enron was thought to be a market master until it fell apart.
Bernie Madoff’s clients were happy with their returns until the fraud was exposed.
The only difference in the cryptocurrency world is that a lot of the players have a suspicion that some parts of the system are powered by fraud, but they either wave it away (buyer beware / I can buy the dip if the market crashes) or they think they can get their money out before it really crashes down.
Enron was thought to be a market master until it fell apart.
Bernie Madoff’s clients were happy with their returns until the fraud was exposed.
The only difference in the cryptocurrency world is that a lot of the players have a suspicion that some parts of the system are powered by fraud, but they either wave it away (buyer beware / I can buy the dip if the market crashes) or they think they can get their money out before it really crashes down.
I agree. Also:
Drop Bitcoin now. The more people hold it, the more damage it will do when it implodes.
Drop Bitcoin now. The more people hold it, the more damage it will do when it implodes.
Agreed. Surprised there are so many Bitcoin lovers on HN and in the startup scene, which is supposed to consist of smarter-than-average people. Bitcoin is basically shitty gold, because unlike gold, it has no intrinsic value and can go to zero, it's all based on fragile sentiment.
Newton lost a lot of money in the south sea bubble. Just because they are smarter it does not make them more rational.
I've been cashing out of my crypto weekly. Started in January, going to continue until i'm dry.
I can't predict when this garbage explodes, but i'll at least have the majority of the money out or all of it. If i'm wrong, i'm wrong, but all of this is fishy as fuck.
Defi loans, using your crypto as collateral to buy more crypto, tether printing off the charts. Most people don't care though, they see number go up and ignore the noise.
I can't predict when this garbage explodes, but i'll at least have the majority of the money out or all of it. If i'm wrong, i'm wrong, but all of this is fishy as fuck.
Defi loans, using your crypto as collateral to buy more crypto, tether printing off the charts. Most people don't care though, they see number go up and ignore the noise.
I think bitcoin can be a technological marvel that has utility to humanity, even if it's being pumped artificially and its value falls back to (or below) what it was before it was pumped.
I think you underestimate just how mighty 'fragile' sentiment can be.
I think you underestimate just how mighty 'fragile' sentiment can be.
Same can be said for gold.
Are most users even capable of melting it into tools when there's nobody that wants to trade for it?
Are most users even capable of melting it into tools when there's nobody that wants to trade for it?
The argument for gold is that it isn't 100% a speculative investment.
According to Wikipedia(https://en.wikipedia.org/wiki/Gold) 50% of gold's use case is in making jewelry and 10% is used for industry.
On the other hand, Bitcoin isn't used for anything, except as for a speculative investment, not even as a currency or as a "decentralized PayPal".
> The argument for gold is that it isn't 100% a speculative investment. According to Wikipedia(https://en.wikipedia.org/wiki/Gold) 50% of gold's use case is in making jewelry and 10% is used for industry. On the other hand, Bitcoin isn't used for anything, except as for a speculative investment, not even as a currency or as a "decentralized PayPal".
Also, Gold has literally thousands of years of cultural precedent as being a "valuable thing." Bitcoin, not so much.
Also, Gold has literally thousands of years of cultural precedent as being a "valuable thing." Bitcoin, not so much.
Liquid value that's easily transferred has utility on its own.
It's not a genuine argument to claim that "bitcoin isn't used for anything".
It's not a genuine argument to claim that "bitcoin isn't used for anything".
That's the value of the Bitcoin system, not of a single Bitcoin. Gold can provide utility by itself, for example, you can make jewelry from it.
Do you think the value of Facebook stock is in the tangible worth of their building, or IP?
For the vast majority of people Bitcoin in its current form provides a worse user experience than PayPal, VISA, etc.. because the fees are a lot higher and the transaction times are longer.
If you want to buy $1.5 billion worth of Bitcoin the $5-$50 transaction fee doesn't matter. For the majority of people it matters though.
If you want to buy $1.5 billion worth of Bitcoin the $5-$50 transaction fee doesn't matter. For the majority of people it matters though.
What would you rather have magically transferred to you and why?
All the gold in the world or all the bitcoins in the world?
All the gold in the world or all the bitcoins in the world?
Right, where would people even get 700 B.C. technology to “use” gold!?
(Of course gold has intrinsic value! Just because you can’t use a thing, doesn’t make it worthless to me, I’ll still buy your gold despite you not knowing anything but how to pull it from your pocket)
(Of course gold has intrinsic value! Just because you can’t use a thing, doesn’t make it worthless to me, I’ll still buy your gold despite you not knowing anything but how to pull it from your pocket)
It is even worse than gold: it has negative value due to the insane energy consumption.
I assume you've weighed this against the waste materials and environmental impact that results from mining gold, such the usage of mercury or cyanide to process the ore.
> Agreed. Surprised there are so many Bitcoin lovers on HN and in the startup scene, which is supposed to consist of smarter-than-average people. Bitcoin is basically shitty gold, because unlike gold, it has no intrinsic value and can go to zero, it's all based on fragile sentiment.
Being "smart" often doesn't translate into making good decisions or having good judgment. Sometimes intelligence only amounts to better capabilities at rationalizing whatever harebrained thing you already wanted to do, instead of giving up on it.
I think Bitcoin hits a bunch of special-interest buttons in some people that make it very difficult to put aside, for instance: truly innovative technology, startup thinking/wanting to be in on the "ground floor" of a big success, sci-fi made real, libertarianism, etc.
Being "smart" often doesn't translate into making good decisions or having good judgment. Sometimes intelligence only amounts to better capabilities at rationalizing whatever harebrained thing you already wanted to do, instead of giving up on it.
I think Bitcoin hits a bunch of special-interest buttons in some people that make it very difficult to put aside, for instance: truly innovative technology, startup thinking/wanting to be in on the "ground floor" of a big success, sci-fi made real, libertarianism, etc.
Well there's a false equivalence for the ages.
Apparently the size of Tether seems huge, 34 B$ of dollar-denominate liabilities, but Binance, the largest exchange, has most fiat customer deposits in USDT. Moreover, in the last year futures trading has moved from Bitcoin margined to USDT margined and it is very profitable. So I wouldn’t be surprised if large funds are trading those future markets and they require USDT.
But offcourse it could still be insolvent if they issued too much or simply made insolvent if the assets (t-bills, cd) backing the issuances are frozen from US authorities. Just assume that as a known risk and plan accordingly
But offcourse it could still be insolvent if they issued too much or simply made insolvent if the assets (t-bills, cd) backing the issuances are frozen from US authorities. Just assume that as a known risk and plan accordingly
Pretty sure Binance is now BUSD for all deposits, their own USD token
>BUSD for all deposits, their own USD token
Which, goes without saying, is fully backed by USD reserves and properly audited ?
Which, goes without saying, is fully backed by USD reserves and properly audited ?
Kind of, see the monthly attestations at https://www.paxos.com/attestations/ . It's significantly better than USDT, but IMHO not fully at a level where you can say "properly audited" without any caveats.
Lots of people want to hold bitcoin, because it might be a great investment.
Lots of people want to hold USD, because it has the backing of the world's largest economy.
Nobody wants to hold USDT.
The only use for it is as an in/off ramp for bitcoin (where it is used only briefly). Or as part of a probably-illegal scheme where Tether Inc uses bitcoin as collateral to issue a loan to buy more tethers...
Lots of people want to hold USD, because it has the backing of the world's largest economy.
Nobody wants to hold USDT.
The only use for it is as an in/off ramp for bitcoin (where it is used only briefly). Or as part of a probably-illegal scheme where Tether Inc uses bitcoin as collateral to issue a loan to buy more tethers...
> Nobody wants to hold USDT.
If it exists, it exists in a wallet somewhere.
Presumably the Tether company isn’t creating USDT on the books just to keep it in their balance sheet.
It’s being held somewhere. Exchanges likely have a lot of it.
If it exists, it exists in a wallet somewhere.
Presumably the Tether company isn’t creating USDT on the books just to keep it in their balance sheet.
It’s being held somewhere. Exchanges likely have a lot of it.
Do you have evidence or is this all conjecture?
Another important takeaway from this data is that Tether is printing ~$500 million per day.
That's an incredible amount of (probably) fake money being pumped right into the market.
3 days of Tether is equal to Tesla's whole investment.
That's an incredible amount of (probably) fake money being pumped right into the market.
3 days of Tether is equal to Tesla's whole investment.
Tether's collapse will be to Mt Gox what Little Boy was to a firecracker.
I wished people understood how Tether works. Bitcoin is up 6X this year , 600%. Many exchanges use Tether to onboard clients and that is why Tether is printed.
Tldr; Tether gets printed whenever Bitcoin demand goes up and that's in their whitepaper.
For downvoters: You are downvoting facts and truth, quite far from your scientific beliefs. Just read the actual whitepaper and then come and downvote. Don't repeat what you read or heard or think is obvious, obviously.
Tldr; Tether gets printed whenever Bitcoin demand goes up and that's in their whitepaper.
For downvoters: You are downvoting facts and truth, quite far from your scientific beliefs. Just read the actual whitepaper and then come and downvote. Don't repeat what you read or heard or think is obvious, obviously.
I’m not sure you understand how it works.
Please explain to me exactly how Tether is used to onboard clients and how it gets printed.
Please explain to me exactly how Tether is used to onboard clients and how it gets printed.
Just read their whitepaper and how exchanges use it before you downvote someone that has a different (correct) opinion than you. DYOR
Yes their white paper explains this quite plainly: an entity sends them fiat and they issue an equivalent number of Tether.
What you’re suggesting is very different. And your unwillingness to explain something that is so simple speaks volumes.
I’ve done my research. You’ve made a few unsubstantiated claims and then refuse to substantiate them.
What you’re suggesting is very different. And your unwillingness to explain something that is so simple speaks volumes.
I’ve done my research. You’ve made a few unsubstantiated claims and then refuse to substantiate them.
>Tldr; Tether gets printed whenever Bitcoin demand goes up and that's in their whitepaper.
The theory is sound, but the experimental verification of the theory (an actual audit of USD reserves) is sorely lacking.
Plus, if you really dig into the history of the folks involved with Tether, I mean, I'm generally no fan of ad-hominems and generally willing to give people the benefit of the doubt, but in this case, the reek of fraud is overpowering [1]
[1] https://nicolaborzi.medium.com/the-lawless-rollercoaster-of-...
The theory is sound, but the experimental verification of the theory (an actual audit of USD reserves) is sorely lacking.
Plus, if you really dig into the history of the folks involved with Tether, I mean, I'm generally no fan of ad-hominems and generally willing to give people the benefit of the doubt, but in this case, the reek of fraud is overpowering [1]
[1] https://nicolaborzi.medium.com/the-lawless-rollercoaster-of-...
did you google the article that says how they submitted papers to NY attorney that they are fully backed?
>did you google the article that says how they submitted papers to NY attorney that they are fully backed?
Nope, haven't.
If so, I'd expect this to have hit most of the media channels dedicated to crypto (some of which I am sub'd to).
Not a peep.
Link?
Nope, haven't.
If so, I'd expect this to have hit most of the media channels dedicated to crypto (some of which I am sub'd to).
Not a peep.
Link?
Is this still a thing? I thought we cracked down on Tether already?
Is that why BTC is 55k?
Is that why BTC is 55k?
2019 hackers - Bitcoin is going to collapse + downvoting anyone who beleive in bitcoin.
2021 hcakers - USDT is going to collapse + downvoting this.
2021 hcakers - USDT is going to collapse + downvoting this.
Who is holding all this tether? I fully get the usecase of buying tether for usd, then going to an exchange to buy Bitcoin, there the exchange might briefly hold the tether, but would they not go back and convert the tether to dollars rather than hang on to it?
Or are we really in a scenario where the majority of the usd pumped into crypto are held by tether and only “IOU’s” at the exchangs? And a crash in tether would simultaneously pull a my gox on almost all exchanges?
Or are we really in a scenario where the majority of the usd pumped into crypto are held by tether and only “IOU’s” at the exchangs? And a crash in tether would simultaneously pull a my gox on almost all exchanges?
Users. Users are holding all of this USDT. Anyone with a dollar pnl on Binance and most other exchanges is actually holding USDT.
The exchanges don’t have any USD. They never did and they don’t have banking relationships to process USD anyway.
As to why anyone would hold USDT especially when there are better alternatives? They wouldn’t. But it’s not redeemable (Tether claim it is but it’s never actually been proven).
Fiat goes in. Tether comes out. And that’s irreversible. It’s an amazing scam.
The exchanges don’t have any USD. They never did and they don’t have banking relationships to process USD anyway.
As to why anyone would hold USDT especially when there are better alternatives? They wouldn’t. But it’s not redeemable (Tether claim it is but it’s never actually been proven).
Fiat goes in. Tether comes out. And that’s irreversible. It’s an amazing scam.
Note that Kraken has a USD<->USDT trading pair, so it is convertible there (and only there AFAIK)
The consensus is that all/most trading there is wash trading to give the illusion of volume. But like all bank runs, they don’t occur until enough people actually ask for their money.
Until that point, people seem happy to consider USDT equivalent to USD (and that may never change)
Until that point, people seem happy to consider USDT equivalent to USD (and that may never change)
That doesn't make any sense.
USDT is issued by Tether so if it is used by Binance, Binance would have had to buy it, assumingly from the fiat that went in.
USDT is issued by Tether so if it is used by Binance, Binance would have had to buy it, assumingly from the fiat that went in.
That assumption is the key issue: Binance doesn’t have USD banking, there is no way for them to accept USD for which to buy USDT.
Exchanges use Tether because they don’t have banking and can’t accept USD. So the USD has to find its way to Tether by some other mechanism. They claim it’s institutions, which is absurd. No institutional investor would ever give billions to an unaudited offshore entity when they can send fiat directly to legit exchanges. Michael Saylor himself says no institutions are using Tether.
So where do the Tethers come from? Maybe it’s not a fraud. But the answer should be very simple, and yet they cannot explain it.
Exchanges use Tether because they don’t have banking and can’t accept USD. So the USD has to find its way to Tether by some other mechanism. They claim it’s institutions, which is absurd. No institutional investor would ever give billions to an unaudited offshore entity when they can send fiat directly to legit exchanges. Michael Saylor himself says no institutions are using Tether.
So where do the Tethers come from? Maybe it’s not a fraud. But the answer should be very simple, and yet they cannot explain it.
>75% of USDC, which is audited, has been printed in the last 6 months, so not surprising, or indicative of anything sketchy that USDT would be growing at a similar rate.
https://coinmarketcap.com/currencies/usd-coin/
https://coinmarketcap.com/currencies/usd-coin/
USDT and USDC are fungible. It’s almost a certainty that USDT has leaked into USDC.
Imagine this:
1) Print USDT out of thin air
2) Send USDT to Binance and buy BTC
3) Send BTC to Coinbase and sell for USD.
4) Convert USD to USDC
You’ve now turned imaginary USDT into what is properly backed USDC. Why do this? Because then you don’t have to worry about pesky USD money trails or bank account seizures.
Imagine this:
1) Print USDT out of thin air
2) Send USDT to Binance and buy BTC
3) Send BTC to Coinbase and sell for USD.
4) Convert USD to USDC
You’ve now turned imaginary USDT into what is properly backed USDC. Why do this? Because then you don’t have to worry about pesky USD money trails or bank account seizures.
But Occam's razor says it's probably just that a whole ton of money has gone into and trading volumes have increased a lot over the past 6 months.
No, it doesn’t. Occam’s razor literally says if it walks like a duck and quacks like a duck, it’s probably a duck.
Tether has admitted to being fractionally backed. They are unaudited and the directors are ghosts.
Who the hell would deposit with that type of an organization? Most people would rather just transact in fiat and for those who must have stable coins, every other stablecoin is an order of magnitude safer.
Tether has admitted to being fractionally backed. They are unaudited and the directors are ghosts.
Who the hell would deposit with that type of an organization? Most people would rather just transact in fiat and for those who must have stable coins, every other stablecoin is an order of magnitude safer.
It's strange how perfectly rational people who know Occam's razor and Popper's falsifiability principle, and can explain with great eloquence why correlation is not causation, are unable to apply the same logical reasoning to cryptoassets.
Because then you don’t have to worry about pesky USD money trails or bank account seizures.
How do you deposit/withdraw into a legit exchange like Coinbase without having proper KYC?
How do you deposit/withdraw into a legit exchange like Coinbase without having proper KYC?
Getting BTC into Coinbase is far easier than getting hundreds of millions of USD out.
So if you can't get it out, then doesn't that break your conversion model? Why are these entities holding millions of dollars on Coinbase that they can't get out?
I said it was harder, not impossible.
The end game all depends on the abilities of the proprietors to launder the proceeds. But that’s the rub in all criminal operations and why money launderers are paid so handsomely.
The end game all depends on the abilities of the proprietors to launder the proceeds. But that’s the rub in all criminal operations and why money launderers are paid so handsomely.
I don't know what percent of Tether's funds are actually backed by USD. And I don't trust them as a company.
But lets look at the economic game theory of it:
- There is currently no premium on Bitcoin prices on Tether exchanges vs non-tether exchanges (http://www.untether.space/)
- USD/USDT pairs can be traded on legit exchanges like Kraken and are currently trading evenly
If the theory is that unbacked Tethers drive up Bitcoin prices, then we should see a premium on Bitfinex/Binance, because that's where buying demand should prop up first. A premium doesn't exist at the moment.
And further, lets say Tether is exposed and crashes. We would expect that users race to buy Bitcoin with their bad USDT and withdraw. The only bag-holder is whoever is using USDT. Bitcoin holders would suffer in the short term as speculators become cautious, but technically should not be affected other than a couple of albeit large crypto gateways potentially going under.
But lets look at the economic game theory of it:
- There is currently no premium on Bitcoin prices on Tether exchanges vs non-tether exchanges (http://www.untether.space/)
- USD/USDT pairs can be traded on legit exchanges like Kraken and are currently trading evenly
If the theory is that unbacked Tethers drive up Bitcoin prices, then we should see a premium on Bitfinex/Binance, because that's where buying demand should prop up first. A premium doesn't exist at the moment.
And further, lets say Tether is exposed and crashes. We would expect that users race to buy Bitcoin with their bad USDT and withdraw. The only bag-holder is whoever is using USDT. Bitcoin holders would suffer in the short term as speculators become cautious, but technically should not be affected other than a couple of albeit large crypto gateways potentially going under.