Topic: Tether (Read 680 times)
@malevolent. It might also be those audit firms being afraid to discover accounts of Tether’s clients that might bring them threats of bodily harm if they publish the real report hehehe. I am clearly joking, however, we certainly do not know and it only brings more questions.
Maybe they are not telling the whole story? Or Tether asked of them to put something in a report that they weren't willing to?
@exstasie. However, we should be skeptics and ask why do the big auditing firms do not want to audit Tether? Afraid themselves of what they might find in those accounts hehehe?
There is certainly nothing that can be proven for or against about Tether unless there was a transparent audit of their accounts. Why will they not do this if they have nothing questionable?
Their general counsel has said in the past that the big auditing firms won't touch them:
Quote
“The bottom line is an audit cannot be obtained [...] The big four firms are anathema to that level of risk. We’ve gone for what we think is the next best thing.”
https://cointelegraph.com/news/tether-has-enough-usd-to-back-tokens-says-law-firm-in-unofficial-statement
Tether is pretty shady, which lends some credence to that statement.
Giancarlo, one of the founders of Bitfinex, infamously said a few years ago, "We're not criminals, but now we have to learn to bank like criminals." I don't doubt it!
@adaseb. There is certainly nothing that can be proven for or against about Tether unless there was a transparent audit of their accounts. Why will they not do this if they have nothing questionable?
In any case, read this article. To not make some people angry, assume this is FUD but fact based FUD, however.
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
In any case, read this article. To not make some people angry, assume this is FUD but fact based FUD, however.
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
I think unless you work at Tether its difficult to prove whether they are fake or not exactly backed 1:1. When crypto crashed in 2018, there actually was some tether which was redeemed back to US dollar however it was a small amount that would of not been proof whether they are solvent or not. Well it went from $2.8B to $1.8B so about $1B, not exactly small however if there was issues redeeming tether back then, somebody would of made claims.
So it proved that they at least had 33% in reserves which we all knew in 2019 when it was proved it had 75% in reserves. Hence even if BTC crashed to $5K again, and 33% of all tether was removed from circulations, it still wouldn't prove a "tether bank run" since it wouldn't remove enough reserves to make them run out of money.
I think eventually people will just switch from Tether to USDC or DAI and call it a day. Eventually in a few years, Tethers market cap can be replaced with USDC. USDC grew alot in the last year and still minting every day.
So it proved that they at least had 33% in reserves which we all knew in 2019 when it was proved it had 75% in reserves. Hence even if BTC crashed to $5K again, and 33% of all tether was removed from circulations, it still wouldn't prove a "tether bank run" since it wouldn't remove enough reserves to make them run out of money.
I think eventually people will just switch from Tether to USDC or DAI and call it a day. Eventually in a few years, Tethers market cap can be replaced with USDC. USDC grew alot in the last year and still minting every day.
I don't get why some of you think that those who suspect Tether of foul play have their own agenda and are spreading FUD.
People who run Tether were lying about their reserves and being backed 1:1.
I always support transparency but if a business is not transparent it's their choice. It's going to limit the number of clients and make people suspicious but it's fine if they choose to go this way. What I can't stand is lying. When they finally admitted that rumors of them not being 100% backed by USD or even any fiat were true on their site it still said that USDt is backed 1:1. I remember it because when the news came out I went there to check if this information was changed or not.
Now it says:
So if they make a few more tethers (not backed) and lend them to someone, they can say these tethers are backed by IOU. This is a very smart way to make value from debt and get people to sell them real bitcoins for their USDt that is backed by other USDt loaned to other people for a promise of return.
People who run Tether were lying about their reserves and being backed 1:1.
I always support transparency but if a business is not transparent it's their choice. It's going to limit the number of clients and make people suspicious but it's fine if they choose to go this way. What I can't stand is lying. When they finally admitted that rumors of them not being 100% backed by USD or even any fiat were true on their site it still said that USDt is backed 1:1. I remember it because when the news came out I went there to check if this information was changed or not.
Now it says:
Quote
Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties
So if they make a few more tethers (not backed) and lend them to someone, they can say these tethers are backed by IOU. This is a very smart way to make value from debt and get people to sell them real bitcoins for their USDt that is backed by other USDt loaned to other people for a promise of return.
At the end of the day if one day Tether company is found guilty on american soil, they will not be used by any american exchange at all and that is an important development. I know that Tether is not an american company and what they are doing is working with Bahamian banks and all by the guise of "USA wants everyone to obey, Bahama gives us freedom" but the reality is that they do not want ot be found guilty of anything so they ran away and opened an off-shore account as their main account and that's it. It wasn't to make sure usa doesn't get involved unfairly, it was to get away from fair audits so that is why they are there.
Hence when one day USA decides that Tether is bad business and nobody can work with them, all their american partnerships will end, and all the american exchanges will delist them, which is why it is quite important that they have a plan for that situation.
Hence when one day USA decides that Tether is bad business and nobody can work with them, all their american partnerships will end, and all the american exchanges will delist them, which is why it is quite important that they have a plan for that situation.
Tether FUD is very enticing. But is Tether pumping Tesla also? No. So there's probably something else at play here.
Not probably, there IS actually something at play here. The Tether truthers have probably missed the golden opportunity to buy and HODL Bitcoin because “Tether bad”, then have torturously watched it surge to $20,000, $30,000, then $40,000 next. Tether is simply a creative way to infuse capital in Bitcoin, if not Tether it would be another way.
Agreed
So I think even if FUD, the tether story has sufficient noise in the net to affect the price.
I had been expecting tether to die a few years ago. The fact that it hasn't is plus in my book that tether is legit.
There is still time for that, the authorities will scrutinize the entire market in the next 5 years and it is inevitable, if i am not wrong investigation regarding Tether is going on and i am sure they will be audited and then we will get a clear picture about how they are minting billions worth of coins whenever the price of bitcoin starts rallying. I had been expecting tether to die a few years ago. The fact that it hasn't is plus in my book that tether is legit.
Since bitcoin doesn't have a company like that behind it, we can safely assume that it is going to be fine and you do not have to worry about it. Those are the difference, check a token or a coin you want to buy and if you see there is an organization or a company behind it then you should stay away from them, if there is none then you can be fine about it as well.
So I think even if FUD, the tether story has sufficient noise in the net to affect the price.
I had been expecting tether to die a few years ago. The fact that it hasn't is plus in my book that tether is legit.
There is still time for that, the authorities will scrutinize the entire market in the next 5 years and it is inevitable, if i am not wrong investigation regarding Tether is going on and i am sure they will be audited and then we will get a clear picture about how they are minting billions worth of coins whenever the price of bitcoin starts rallying. I had been expecting tether to die a few years ago. The fact that it hasn't is plus in my book that tether is legit.
I believe some of those people spreading the Tether Truthers’ FUD, might also the same people who have lesser than $30,000 bids placed. Sorry, but it would take MORE to get these Bitcoins from these two strong hands.
It seems that the Tether FUD is still ongoing. People are panicking like crazy on Crypto Twitter and people are Reddit are getting their posts deleted because there is too much posting of claims without evidence. I am actually surprised that so many people are talking about Tether this week because I would of assumed that tether was so 2017ish.
"China banned bitcoin" is also so 2013is FUD but still we hear it even today, they even get creative sometimes and replace the word "China" with some other country to make the FUD look new. Tether FUD is no different from that or any other old FUD. As long as people pay attention to them and they can cause weak hands to panic sell, they will be repeated over and over again.
It seems that the Tether FUD is still ongoing. People are panicking like crazy on Crypto Twitter and people are Reddit are getting their posts deleted because there is too much posting of claims without evidence. I am actually surprised that so many people are talking about Tether this week because I would of assumed that tether was so 2017ish.
Either way, there is a post going around Twitter that 3 days before they handed in the documents that the tether prints stopped. So its been 5 days and no tether prints yet. Looking at the market cap for tether, they usually did a print every few days or so. So its either a coincidence, especially that its a weekend now or if there are no prints for the next few days or weeks. People will start to panic because they will think "Why did the printing stop " and maybe sell their BTC in anticipation of a crash.
Either way, there is a post going around Twitter that 3 days before they handed in the documents that the tether prints stopped. So its been 5 days and no tether prints yet. Looking at the market cap for tether, they usually did a print every few days or so. So its either a coincidence, especially that its a weekend now or if there are no prints for the next few days or weeks. People will start to panic because they will think "Why did the printing stop " and maybe sell their BTC in anticipation of a crash.
So I think even if FUD, the tether story has sufficient noise in the net to affect the price.
I had been expecting tether to die a few years ago. The fact that it hasn't is plus in my book that tether is legit.
HOWEVER
the fact they have not been audited makes me think they are fractional reserve.
I also think most exchanges are fractional reserve in crypto.
In fact, except for signed addresses/crypto and dex/uni swap every other financial instrument is fractional, it's just a question of how much.
We have faked USD chaseing faked btc, so it should probably even out, excepting that real BTC is likely undervalued
I kinda wish tether would just go, take the BTC hit an carry on. However that's just wishful thinking, a new FUD will be invented and the cycle will continue.
Every Epoch will have its Gox.
I had been expecting tether to die a few years ago. The fact that it hasn't is plus in my book that tether is legit.
HOWEVER
the fact they have not been audited makes me think they are fractional reserve.
I also think most exchanges are fractional reserve in crypto.
In fact, except for signed addresses/crypto and dex/uni swap every other financial instrument is fractional, it's just a question of how much.
We have faked USD chaseing faked btc, so it should probably even out, excepting that real BTC is likely undervalued
I kinda wish tether would just go, take the BTC hit an carry on. However that's just wishful thinking, a new FUD will be invented and the cycle will continue.
Every Epoch will have its Gox.
I read this article which says that all the volumes is basically USDT based in non-US exchanges. If you takeout USDT volumes then nothing much is left with regards to volume.
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
When the individual sells their alt back for tether, they send their tether back into Bitfinex and Bitfinex converts it back into USD or you could go to the Tether.io website and have the funds sent into your bank account. I never tried the latter because the Tether.io function to withdraw was disabled and you could only trade better back into BTCUSDT, then sell that BTC on another exchange like Coinbase or Gemini for USD and withdraw that. Was annoying due to the fees involved.
After Bitfinex and Tether's banking troubles in 2017-2018, they realized it wasn't sustainable to service high volumes of small customer withdrawals. Tether basically stopped servicing individuals directly. They only interface with whales, companies, institutions. Last I heard, the minimum withdrawal amount was $50K. Bitfinex followed suit in 2018, raising the minimum fiat withdrawal amount to $10K.
It was a smart move and kept them in business. Making small customers do their fiat banking elsewhere drastically reduced the load on their withdrawal network. At the same time, the ability for whales to redeem large amounts of USDT for USD from Tether kept the markets pegged very effectively. All downward pressure on USDT (or Bitfinex USD) prices from retail customers cashing out gets absorbed by Tether's arbitrage whales.
Love them or hate them, the people running iFinex are very good at what they do.
From what I understand the process works like this. At least it was this way back in 2017. No idea if its the same as today.
Someone wires money into Bitfinex, they don't want to trade any USD pairs on Bitfinex but want to send the USD elsewhere to buy alts like on Binance. So then Bitfinex converts the USD to USDT. Then that individual withdraws this USDT and sends to any exchange they want that accepts USDT. Right now Bitfinex has USDT pairs however back in 2017 they didn't actually trade Tether on their exchange. Their BTCUSD pair was actually against USD and not USDT.
When the individual sells their alt back for tether, they send their tether back into Bitfinex and Bitfinex converts it back into USD or you could go to the Tether.io website and have the funds sent into your bank account. I never tried the latter because the Tether.io function to withdraw was disabled and you could only trade better back into BTCUSDT, then sell that BTC on another exchange like Coinbase or Gemini for USD and withdraw that. Was annoying due to the fees involved.
Someone wires money into Bitfinex, they don't want to trade any USD pairs on Bitfinex but want to send the USD elsewhere to buy alts like on Binance. So then Bitfinex converts the USD to USDT. Then that individual withdraws this USDT and sends to any exchange they want that accepts USDT. Right now Bitfinex has USDT pairs however back in 2017 they didn't actually trade Tether on their exchange. Their BTCUSD pair was actually against USD and not USDT.
When the individual sells their alt back for tether, they send their tether back into Bitfinex and Bitfinex converts it back into USD or you could go to the Tether.io website and have the funds sent into your bank account. I never tried the latter because the Tether.io function to withdraw was disabled and you could only trade better back into BTCUSDT, then sell that BTC on another exchange like Coinbase or Gemini for USD and withdraw that. Was annoying due to the fees involved.
Grossly overstated is what I'm saying, 5% estimate is a far cry from saying Bitcoin was only used for drugs, there were thousands of places already (mostly small online businesses) accepting Bitcoin by the time of SR's seizure, and its major usage wasn't too far off from today, namely speculation.
So what? What really matters is news media and popular perception. That there was a popular narrative (in the news media, among politicians, etc.) that Bitcoin was primarily a currency for criminals and drug dealers in its early days is pretty undeniable. I lived through it.
Narratives are extremely important to market trends. Nobody cared what actual percentage of Bitcoin transactions were used on the Silk Road. What mattered is that Bitcoin (in the media, in the legal system) was previously painted as illegitimate, and was being made legitimate by shutting down criminal entities like the Silk Road.
There exists a similar narrative today that Tether is an illegitimate, criminal entity, one of the primary ones casting a shade over the entire Bitcoin market. A boogeyman just like Silk Road was in the early years. The USD values in question are larger, but then again, so is overall Bitcoin market liquidity.
The Tether truthers have probably missed the golden opportunity to buy and HODL Bitcoin because “Tether bad”, then have torturously watched it surge to $20,000, $30,000, then $40,000 next. Tether is simply a creative way to infuse capital in Bitcoin, if not Tether it would be another way.
Exactly. Tether is just a way to bridge the gap between fiat exchanges and secondary markets. It doesn't matter whether USD flows into Tether or Coinbase. Either way, it's going to push crypto prices up.
Tether FUD is very enticing. But is Tether pumping Tesla also? No. So there's probably something else at play here.
Not probably, there IS actually something at play here. The Tether truthers have probably missed the golden opportunity to buy and HODL Bitcoin because “Tether bad”, then have torturously watched it surge to $20,000, $30,000, then $40,000 next. Tether is simply a creative way to infuse capital in Bitcoin, if not Tether it would be another way.
So is it your contention that investors didn't care that Silk Road got taken down, because it was so small and nobody cared about it?
Or are you suggesting that nobody cared that Bitcoin's image was being cleaned up, including all the illegal activity being FUD'd about in the media? It was irrelevant to the bubble?
At the time, American Congresspeople were demanding a crackdown on Bitcoin and the Silk Road.
It's easy to erase this stuff in hindsight, but Silk Road was a very big deal at the time. You can say it was only 5% of transactions, but that's a big deal, honestly.
Or are you suggesting that nobody cared that Bitcoin's image was being cleaned up, including all the illegal activity being FUD'd about in the media? It was irrelevant to the bubble?
At the time, American Congresspeople were demanding a crackdown on Bitcoin and the Silk Road.
It's easy to erase this stuff in hindsight, but Silk Road was a very big deal at the time. You can say it was only 5% of transactions, but that's a big deal, honestly.
The media will peddle whatever brings in clicks, FUD or not. The kind of entities that would stay away from Bitcoin due to its potential use for DNMs stay away to this day. Whatever institutions that are investing nowadays aren't investing because Silk Road got taken down but because it's easier, and most importantly because the entire ecosystem is significantly larger. To give a sense of perspective, in late 2011 a $20k buy or sell was enough to move the market by 10% on Mt. Gox, the biggest exchange.
Grossly overstated is what I'm saying, 5% estimate is a far cry from saying Bitcoin was only used for drugs, there were thousands of places already (mostly small online businesses) accepting Bitcoin by the time of SR's seizure, and its major usage wasn't too far off from today, namely speculation.
Now you're shifting the goal posts. Wasn't your claim that Tether being taken down will cause a bear market? 
I'm not outright saying it will, only that it may.
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