[2021-01-20] Janet Yellen suggests 'curtailing' cryptocurrencies such as Bitcoin - page 2.

mindrust

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Quote from: bbc.reporter on January 30, 2021, 09:07:38 PM

@Betwrong, @mindtrust. I am reading through your posts. I might be mistaken, however, it appears that you are contradicting yourselves.

Similar, to some premined altcoins, 78% of the bitcoin in circulation has become illiquid. They are only held in wallets as speculative investments waiting to be sold at higher prices. There are presently only 4.2 million coins that are traded daily.

Where did I contradict myself? Saying that tether going down would harm bitcoin and also pump it at the same time? Do you think pumping bitcoin gox style is actually helping bitcoin? No.

Quote from: bbc.reporter on January 30, 2021, 09:07:38 PM

It will not take that much to pump the price to $100k or dump this to $10k.

Agreed. Gox took the price from 2 digits to 3 digits. The markets were much smaller back in the day that's right but the trades were actually happening against the real dollar. (we learned later on there was no dollars -or bitcoins- huh) Right now, the amount of Dollars (tethers) they have is infinite. (again, they actually don't) Which means they can pump (or dump) crypto to anywhere they want.

Quote from: bbc.reporter on January 30, 2021, 09:07:38 PM

Also, on Tether if taken down, bitcoin might pump in the beginning

Yep.

Quote from: bbc.reporter on January 30, 2021, 09:07:38 PM

however, will everyone really want to sell their bitcoins for worthless, taken down USDT? There will be a liquidity shock. All bitcoins might not have enough buyers for the sellers.

When it starts happening, people won't know that tether is dying. They'll think it is just another pump and dump and free money. Did people give a fuck about it when gox was raising the prices? NO.

Everybody was happy af seeing BTC going from $50 to $1200. (and unhappy after $1200 > $120) The prices were rising huge and some people were making money because somebody else was losing money! (Gox people)

Same story. Of course everybody in this space thinks that it is not them who'll be the next victim... till they are.

bbc.reporter

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@Betwrong, @mindtrust. I am reading through your posts. I might be mistaken, however, it appears that you are contradicting yourselves.

Similar, to some premined altcoins, 78% of the bitcoin in circulation has become illiquid. They are only held in wallets as speculative investments waiting to be sold at higher prices. There are presently only 4.2 million coins that are traded daily.

It will not take that much to pump the price to $100k or dump this to $10k.

Also, on Tether if taken down, bitcoin might pump in the beginning, however, will everyone really want to sell their bitcoins for worthless, taken down USDT? There will be a liquidity shock. All bitcoins might not have enough buyers for the sellers.

mindrust

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Quote from: Betwrong on January 30, 2021, 04:37:10 AM

~

You missed the other part of my post however. What about the trading volume that belongs to tether by 70%? Since you like to see the source of information here it is:

https://coingape.com/tether-dominates-exchange-trading-with-70-of-the-volume/

What do you think will happen when tether goes down and crypto lose its trading volume by 70%?

Not going to affect it much y right i bet it wont.

Betwrong

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Quote from: mindrust on January 28, 2021, 05:06:58 PM

Quote from: Betwrong on January 28, 2021, 08:44:29 AM

~But Tether's market cap is 23 times smaller that that of BTC. ~

I don't think Bitcoin's MC and Tether's MC have the same dynamics.

Many bitcoins are either lost or haven't moved in the last 5-7+ years which means there are way less bitcoins in circulation than people think and that would mean bitcoin's actual marketcap is actually smaller than it looks and therefore it would also mean that bitcoin would get affected by the collapse of tether more than people think.~

Let's use an estimation made by Chainalysis, instead of saying "many".

Quote from: https://www.nytimes.com/2021/01/12/technology/bitcoin-passwords-wallets-fortunes.html

Of the existing 18.5 million Bitcoin, around 20 percent — currently worth around $140 billion — appear to be in lost or otherwise stranded wallets, according to the cryptocurrency data firm Chainalysis.

If we subtracted those 20% from the current Bitcoin MC

636,382,757,275 - (636,382,757,275 : 5) = 509,106,205,820

we would still get a MC that 19 times higher than Tether's.

Now, I'm not absolutely sure about the possible effect of exchanging all USDT for BTC, but I don't think the effect can be big.

bbc.reporter

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@Sithara007. I reckon for the legitimate companies that issued stablecoins with the proper licenses per state in America, it will be hard without an order from the courts. For Tether, it might occur anytime. They are not regulated and do not have the proper licenses.

Tether isn’t regulated by FinCEN. Rather, it is registered with FinCEN. These two R words are quite different. When an institution is registered with FinCEN, this means FinCEN has provided it with an electronic account for uploading suspicious transaction reports (SARs) and $10,000 cash transaction reports (CTRs). As per FinCEN requirements, a registered entity must also implement measures for collecting and verifying the identity of customers.

While it is commendable that Tether has chosen to register itself with FinCEN, collect customer information and regularly file SARs, there’s nothing special about this status.

PayPal, which I mentioned above, is regulated as a money services business in over 50 different U.S. states. Circle and Coinbase, which together issue the second-largest stablecoin, USD coin, have are licensed multiple state financial services departments.

Source https://www.coindesk.com/what-tether-means-when-it-says-its-regulated

Sithara007

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Quote from: figmentofmyass on January 28, 2021, 01:23:21 AM

why? a lot of the market already trusts stablecoins like PAX and USDC a lot more than USDT. they're issued by regulated/licensed companies. plus, if the market starts dumping their stablecoins below their redeemable value, big whales will just arbitrage them back to $1, because free money.

If their bank accounts are frozen by the authorities, then it may not be possible (at least in the immediate term) to convert USDT to USD at 1:1 ratio. Obviously the risk is there for all the stablecoins, because they need bank accounts to store their fiat cash reserves. I don't think that any of them would chose to store the money in the form of banknotes and coins (even if they do so, the risk of confiscation is there). And a few days back, we saw how easy was it for the banks to shut down the account of the former president of the United States. Given that, do you really think it will be difficult for them to either freeze or shut down the bank account of any of these stablecoin foundations?

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Quote from: figmentofmyass on January 28, 2021, 01:23:21 AM

Quote from: bbc.reporter on January 27, 2021, 11:49:07 PM

@Sithara007. You understand, good. I have been telling everyone about this on another thread in the speculation subforum, however, they have called it FUD even if the argument was based on facts. How can anyone call it FUD if it was facts based? It is speculation.

well which one is it---facts or speculation? it's one thing to say tether is/was not 1:1 backed, or that the state of new york is suing them---those are certainly facts. i can agree with that. it's another thing to suggest tether's takedown is a sure thing, and that this will crash the bitcoin market. those aren't facts.

I am not telling everyone that Tether, iFinex, Digiifinex and Bitfinex’s take down is a sure thing, however, their takedown if it were to occur might cause the cryptospace’s version of the big short and another long bear market. That is the speculation.

mindrust

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Quote from: Betwrong on January 28, 2021, 08:44:29 AM

Quote from: mindrust on January 27, 2021, 04:36:57 AM

~ What if they are exiting tether right now? If you were an insider with that information, you would exit tether and buy something else. That could be bitcoin or something else and when enough people do the same thing then bitcoin would moon.

They key word here is, "insider". (knowing something that the majority don't) When that information becomes public, nobody will be able to get out because everybody will try to exit at the same time.

Right now everybody thinks (maybe not everybody) Tether is still OK and no danger ahead. (at least not in the foreseeable future).

Not saying that it is happening right now (i mean the tether collapse) but if it was happening, it would be just like this.

When the news hit the forums, it will already be too late for the Avg. Joe.

But Tether's market cap is 23 times smaller that that of BTC. Even if all the USDT in existence were spent on buying Bitcoin, although it would affect the price in the positive way, I don't think BTC would moon because of that. I think, we are in a phase when no manipulations with other currencies can affect BTC price much.

I don't think Bitcoin's MC and Tether's MC have the same dynamics.

Many bitcoins are either lost or haven't moved in the last 5-7+ years which means there are way less bitcoins in circulation than people think and that would mean bitcoin's actual marketcap is actually smaller than it looks and therefore it would also mean that bitcoin would get affected by the collapse of tether more than people think.

Marketcap is only one side of this story. What is even more important that 70% of the crypto trading volume comes from tether which means tether is responsible for the liquidity of all crypto assets by 70%.

Why do you think would happen when crypto markets lose 70% of its liquidity?

Betwrong

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Quote from: mindrust on January 27, 2021, 04:36:57 AM

~ What if they are exiting tether right now? If you were an insider with that information, you would exit tether and buy something else. That could be bitcoin or something else and when enough people do the same thing then bitcoin would moon.

They key word here is, "insider". (knowing something that the majority don't) When that information becomes public, nobody will be able to get out because everybody will try to exit at the same time.

Right now everybody thinks (maybe not everybody) Tether is still OK and no danger ahead. (at least not in the foreseeable future).

Not saying that it is happening right now (i mean the tether collapse) but if it was happening, it would be just like this.

When the news hit the forums, it will already be too late for the Avg. Joe.

But Tether's market cap is 23 times smaller that that of BTC. Even if all the USDT in existence were spent on buying Bitcoin, although it would affect the price in the positive way, I don't think BTC would moon because of that. I think, we are in a phase when no manipulations with other currencies can affect BTC price much.

figmentofmyass

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Quote from: bbc.reporter on January 27, 2021, 11:49:07 PM

@Sithara007. You understand, good. I have been telling everyone about this on another thread in the speculation subforum, however, they have called it FUD even if the argument was based on facts. How can anyone call it FUD if it was facts based? It is speculation.

well which one is it---facts or speculation? it's one thing to say tether is/was not 1:1 backed, or that the state of new york is suing them---those are certainly facts. i can agree with that. it's another thing to suggest tether's takedown is a sure thing, and that this will crash the bitcoin market. those aren't facts.

Quote from: bryant.coleman on January 27, 2021, 08:18:12 AM

And there will be big impact on the cryptocurrency market. If Tether is not safe, then none of the stablecoins are safe.

why? a lot of the market already trusts stablecoins like PAX and USDC a lot more than USDT. they're issued by regulated/licensed companies. plus, if the market starts dumping their stablecoins below their redeemable value, big whales will just arbitrage them back to $1, because free money.

bbc.reporter

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@Sithara007. You understand, good. I have been telling everyone about this on another thread in the speculation subforum, however, they have called it FUD even if the argument was based on facts. How can anyone call it FUD if it was facts based? It is speculation.

Also, I speculate the market makers in the exchanges themselves would remove their coins from the USDT markets. Yes it might cause a pump in the beginning because of low liquidity from the sell side, however, it will certainly dump later on.

Sithara007

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Quote from: bbc.reporter on January 27, 2021, 09:10:02 PM

I very much disagree that Tether USDT holders can pump bitcoin when the takedown begins. You as a bitcoin holder, why would you sell your bitcoins for something that you know will be worthless after takedown?

In that case the trading volume would decline by a lot. Right now, most of the BTC trading volume is made up of BTC-USDT pair. If that is taken out of the equation, then the volume would decline by more than 50%. The scenario will be different from the one we had after SEC took action against XRP. Back then, most of the users had converted their XRP to BTC, ETH or USDT. But in this case the available options are less in number. I guess a majority of the users will try to convert their USDT to USD or other fiat currency, even if that means paying a hefty markup.

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Quote from: Karartma1 on January 27, 2021, 04:07:29 AM

Quote from: bbc.reporter on January 26, 2021, 11:35:22 PM

@Sithara007. My biggest concern is the Democrats might attack and takedown where they can also hurt the whole cryptospace. Tether.

There are a few people in here who are certain that bitcoin will pump if Tether was taken down because they would exit Tether by buying bitcoin hehe. This is comedy.

If that is where Tether is going where can I sign for it? Cool

It would be a great happy ending. All USDT in circulation would finally move back to BTC where they belong.
Apart from that, that's something I fail to understand: it's only a mere 1:1 representation of a dollar. There has been more to it to let it grow above many $B of capitalization. There are many stablecoins around but tether has always been the preferred choice of traders, speculators and you name others.
Even though, I might be happy if it disappears, I don't think we will ever have something similar if it blows up.
And decentralized alternatives struggles to take off, unfortunately.

I very much disagree that Tether USDT holders can pump bitcoin when the takedown begins. You as a bitcoin holder, why would you sell your bitcoins for something that you know will be worthless after takedown?

cr1776

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Quote from: bryant.coleman on January 27, 2021, 08:18:12 AM

Quote from: cr1776 on January 27, 2021, 06:35:01 AM

I don't know what will happen, but tether and other centralized parts of the crypto scene are vulnerable to big government authoritarian policies much more so than bitcoin. If one didn't have to worry about control freaks in government, things would be much better.

Stablecoins such as Tether are vulnerable to authoritarian action, because unlike the case with Bitcoin or Ethereum, they are not decentralized. The authorities can seize Tether assets and make that token completely worthless. And there will be big impact on the cryptocurrency market. If Tether is not safe, then none of the stablecoins are safe. Trading will come to a halt, especially in jurisdictions where fiat currency is not permitted for trading (such as China). And indications are that USDT will be the next target after XRP.

Exactly. Anything with a central entity - be it person, small group, corporation, developer, miner etc - in a position of power is vulnerable to authoritarian control. Look at ripple. There are probably some jurisdictions that they might be safer than others from over regulation, but they are few and far between. e.g. online casinos in Antigua, others in Cook Islands, Panama etc.

bryant.coleman

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Quote from: cr1776 on January 27, 2021, 06:35:01 AM

I don't know what will happen, but tether and other centralized parts of the crypto scene are vulnerable to big government authoritarian policies much more so than bitcoin. If one didn't have to worry about control freaks in government, things would be much better.

Stablecoins such as Tether are vulnerable to authoritarian action, because unlike the case with Bitcoin or Ethereum, they are not decentralized. The authorities can seize Tether assets and make that token completely worthless. And there will be big impact on the cryptocurrency market. If Tether is not safe, then none of the stablecoins are safe. Trading will come to a halt, especially in jurisdictions where fiat currency is not permitted for trading (such as China). And indications are that USDT will be the next target after XRP.

cr1776

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Quote from: bbc.reporter on January 26, 2021, 11:35:22 PM

@Sithara007. My biggest concern is the Democrats might attack and takedown where they can also hurt the whole cryptospace. Tether.

There are a few people in here who are certain that bitcoin will pump if Tether was taken down because they would exit Tether by buying bitcoin hehe. This is comedy.

I don't know what will happen, but tether and other centralized parts of the crypto scene are vulnerable to big government authoritarian policies much more so than bitcoin. If one didn't have to worry about control freaks in government, things would be much better.

mindrust

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Quote from: bbc.reporter on January 26, 2021, 11:35:22 PM

@Sithara007. My biggest concern is the Democrats might attack and takedown where they can also hurt the whole cryptospace. Tether.

There are a few people in here who are certain that bitcoin will pump if Tether was taken down because they would exit Tether by buying bitcoin hehe. This is comedy.

You know what...

What if they are exiting tether right now? If you were an insider with that information, you would exit tether and buy something else. That could be bitcoin or something else and when enough people do the same thing then bitcoin would moon.

They key word here is, "insider". (knowing something that the majority don't) When that information becomes public, nobody will be able to get out because everybody will try to exit at the same time.

Right now everybody thinks (maybe not everybody) Tether is still OK and no danger ahead. (at least not in the foreseeable future).

Not saying that it is happening right now (i mean the tether collapse) but if it was happening, it would be just like this.

When the news hit the forums, it will already be too late for the Avg. Joe.

Karartma1

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Quote from: bbc.reporter on January 26, 2021, 11:35:22 PM

@Sithara007. My biggest concern is the Democrats might attack and takedown where they can also hurt the whole cryptospace. Tether.

There are a few people in here who are certain that bitcoin will pump if Tether was taken down because they would exit Tether by buying bitcoin hehe. This is comedy.

If that is where Tether is going where can I sign for it? Cool

It would be a great happy ending. All USDT in circulation would finally move back to BTC where they belong.
Apart from that, that's something I fail to understand: it's only a mere 1:1 representation of a dollar. There has been more to it to let it grow above many $B of capitalization. There are many stablecoins around but tether has always been the preferred choice of traders, speculators and you name others.
Even though, I might be happy if it disappears, I don't think we will ever have something similar if it blows up.
And decentralized alternatives struggles to take off, unfortunately.

bbc.reporter

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@Sithara007. My biggest concern is the Democrats might attack and takedown where they can also hurt the whole cryptospace. Tether.

There are a few people in here who are certain that bitcoin will pump if Tether was taken down because they would exit Tether by buying bitcoin hehe. This is comedy.

Sithara007

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Quote from: bbc.reporter on January 26, 2021, 10:16:54 PM

Biden will end up very worse and very aggressive against the cryptospace. This might make us wish it was still Trump and his men in charge hehehe.

In any case, this article talks about how Trump’s presidency and his appointees might have created a lenient regime for the cryptospace. I would argue that we might not have witnessed bitcoin’s new all time highs if it was Hilary who won on 2016.

The Trump administration was largely friendly toward the industry (with a few notable exceptions), and ushered in a wave of regulations and products that were welcomed by the crypto community. The Trump administration stopped short of actually setting a policy direction, however. Almost all of the crypto-friendly actions were conducted by the regulators he nominated to various posts, and no significant legislation on the crypto space was passed or signed into law.

Source https://www.coindesk.com/trump-presidency-crypto-legacy

I would agree. Trump was more or less indifferent to cryptocurrency, but he was not hostile. First of all, we need to understand the fact that mainstream politicians are likely to be hostile towards Bitcoin, due to the competition it poses for the national currencies. And this is especially true for politicians from the left and socialist spectrums, who need to print banknotes like crazy to remain in power. On top of that, Trump was a businessman and he knew about the need to tone down unwanted regulations.

Biden on the other hand has policies similar to that of the Chinese Communist Party. In China, individual users have very few options to invest in. Almost all the assets are over-priced by a factor of 3 to 4, including equities and real estate. The government has imposed restrictions on the purchase of bullion and cryptocurrency, because they believe that if people are given a choice to invest in these assets, then they may no longer invest in other overpriced assets. The super-rich has the option of immigrating, but for the remaining 99.99% of the population there are no other options.

Topic: [2021-01-20] Janet Yellen suggests 'curtailing' cryptocurrencies such as Bitcoin - page 2. (Read 732 times)