This appears to be the cause of the small dump on bitcoin.
However, that might not be the real problem. The real problem might be, are the executives of Bitfinex, Tether and iFinex next?
In any case, Bitmex domain has not yet been seized.
https://www.bitmex.com/
Founders And Executives Of Off-Shore Cryptocurrency Derivatives Exchange Charged With Violation Of The Bank Secrecy Act
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the indictment of Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer, charging the four with violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act, by willfully failing to establish, implement, and maintain an adequate anti-money laundering (“AML”) program at the Bitcoin Mercantile Exchange or “BitMEX.” The case is assigned to United States District Judge John G. Koeltl. REED was arrested in Massachusetts this morning, and will be presented in federal court there. HAYES, DELO, and DWYER remain at large.
Source https://www.justice.gov/usao-sdny/pr/founders-and-executives-shore-cryptocurrency-derivatives-exchange-charged-violation
Topic: The Big Short movie, BTC edition? - page 7. (Read 1934 times)
It appears that they have created a derivative as a hedge against what is also supposed to be also a hedge against the corrupt traditional financial markets hehehe.
New Crypto Derivatives Let You Bet on (or Against) Tether’s Solvency
After years of debating whether tether (USDT) is fully backed 1-for-1 with U.S. dollars, the stablecoin’s critics and defenders alike can now put their money where their mouths are.
Opium, a derivatives exchange, has introduced credit default swaps (CDS) for USDT. The product, launched Thursday, insures the buyer in the event of default by Tether, the issuer of the world’s largest stablecoin and fifth-largest cryptocurrency overall.
In this case, a sharp drop in USDT’s price from the usual $1 is used as a proxy for Tether turning out to be insolvent. So if the token fell to 70 cents, the writer of the contract would pay the buyer 30 cents at maturity.
It’s the second time in a month that Opium has launched a CDS tied to a digital asset. Such contracts have been around on Wall Street since the 1990s and gained notoriety for their role in the 2008 global financial crisis.
Source https://www.coindesk.com/credit-default-swaps-tether-opium
New Crypto Derivatives Let You Bet on (or Against) Tether’s Solvency
After years of debating whether tether (USDT) is fully backed 1-for-1 with U.S. dollars, the stablecoin’s critics and defenders alike can now put their money where their mouths are.
Opium, a derivatives exchange, has introduced credit default swaps (CDS) for USDT. The product, launched Thursday, insures the buyer in the event of default by Tether, the issuer of the world’s largest stablecoin and fifth-largest cryptocurrency overall.
In this case, a sharp drop in USDT’s price from the usual $1 is used as a proxy for Tether turning out to be insolvent. So if the token fell to 70 cents, the writer of the contract would pay the buyer 30 cents at maturity.
It’s the second time in a month that Opium has launched a CDS tied to a digital asset. Such contracts have been around on Wall Street since the 1990s and gained notoriety for their role in the 2008 global financial crisis.
Source https://www.coindesk.com/credit-default-swaps-tether-opium
We still have a price wavering back and forth as we enter week beginning, I think its not yet a good short more a risk to call it. Generally I'd guess weakness and we've failed to maintain the 50 and monthly averages, on the line of losing weekly which I usually relate to positive or negative near term sentiment or momentum in price.
highs today were the 50 daily average again and rejection from there for now.
Nothing there to test really, just this last years peaks would be more of a thing. Break that confirm above and I hope not to flinch for 20k. The real big short will be in dollars in any readjustment, theres political reasons why dollar weak or any other currency does not want to gain vs dollar.
highs today were the 50 daily average again and rejection from there for now.
Quote
maybe retest the old ATH
Nothing there to test really, just this last years peaks would be more of a thing. Break that confirm above and I hope not to flinch for 20k. The real big short will be in dollars in any readjustment, theres political reasons why dollar weak or any other currency does not want to gain vs dollar.
News update on Bitfinex.
I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?
I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?
I don't know all the specifics, but I know Bitfinex screwed themselves by continuing to serve New York based clients like Galaxy Digital (Novogratz) long after they supposedly banned US and NY traders. They were serving those clients during the time period when the $850 million shortfall occurred, so Bitfinex's claims that they don't "cater to local traders" obviously doesn't hold any water. New York has jurisdiction.
I have a theory about what is happening here. The state of New York has very little power to enforce anything against Bitfinex. One might wonder why they are pursuing this case at all. My theory is the New York prosecutor is being used as a pawn in a larger federal investigation into Bitfinex and Tether. New York is extracting a treasure trove of information and documentation about Bitfinex and Tether's structure, bank accounts, etc. I believe they are turning everything over to the DOJ, who is building a case and watching their assets so they can seize them when the time comes.
News update on Bitfinex.
I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?
Today the New York State Supreme Court’s appellate division ruled that Bitfinex will have to face New York state allegations that it hid the loss of commingled client and corporate funds. In April 2019, New York Attorney General Letitia James alleged that Bitfinex lost $850 million in client and corporate funds, and then used money from affiliated stablecoin Tether to cover the loss.
I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?
Today the New York State Supreme Court’s appellate division ruled that Bitfinex will have to face New York state allegations that it hid the loss of commingled client and corporate funds. In April 2019, New York Attorney General Letitia James alleged that Bitfinex lost $850 million in client and corporate funds, and then used money from affiliated stablecoin Tether to cover the loss.
First of all, I'm not keen on Tether, Bitfinex or any crypto remotely related to this kind of infinite printing and opaque structures, but at the same time, this definitely shows us all and hopefully others that if you put your trust in a company, then you always risk the long fingers of the US government. Use Tether/other central coin and understand your risk to your money.
News update on Bitfinex.
I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?
Today the New York State Supreme Court’s appellate division ruled that Bitfinex will have to face New York state allegations that it hid the loss of commingled client and corporate funds. In April 2019, New York Attorney General Letitia James alleged that Bitfinex lost $850 million in client and corporate funds, and then used money from affiliated stablecoin Tether to cover the loss.
The appeals court rejected both Bitfinex’s arguments that Tether is neither a security or commodity, and that since they are not based in New York or cater to local traders, they shouldn’t be answerable to or have to produce certain documents for New York authorities. The appeals court said it has jurisdiction over its issuer.
Source https://messari.io/article/bitfinex-must-face-ny-suit-over-850-million-in-lost-funds
I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?
Today the New York State Supreme Court’s appellate division ruled that Bitfinex will have to face New York state allegations that it hid the loss of commingled client and corporate funds. In April 2019, New York Attorney General Letitia James alleged that Bitfinex lost $850 million in client and corporate funds, and then used money from affiliated stablecoin Tether to cover the loss.
The appeals court rejected both Bitfinex’s arguments that Tether is neither a security or commodity, and that since they are not based in New York or cater to local traders, they shouldn’t be answerable to or have to produce certain documents for New York authorities. The appeals court said it has jurisdiction over its issuer.
Source https://messari.io/article/bitfinex-must-face-ny-suit-over-850-million-in-lost-funds
@pooya87. I am shaking my head on that explanation. The question was if bitcoin's real volume was only 6% of the fake volume, would it be not very possible for the $8.81b of total USDT printed to pump, manipulate or support the price of bitcoin?
Also, what do you speculate would occur if Bitfinex, Ifinex and Tether were sentenced and ordered to remove all their stablecoins from the cryptospace? This might be a very dangerous situation we are in because Ifinex, Bitfinex and Tether might only be shell companies as reported in this article.
Address 1: Suite 13/F, 1308 Bank of America Tower, 12 Harcourt Road Central
When we get back to the first floor, we recheck all the signage and office listings to see if iFinex is anywhere to be seen. It isn’t. We ask the guards if there’s a iFinex somewhere in the building, perhaps unlisted. “No,” they tell us.
Address 2: Easey Commercial Building, Suite 1902, 253–261 Hennessy Rd., Wan Chai
J & C (HK) Business Limited is printed on the opaque window framed within the door. We knock and a faint voice says something in Cantonese. The tonality makes me think we’re welcome. Besides, door’s unlocked. Inside is a small office with a few desks, fluorescent lights, a water cooler, and a printer. In back are two even smaller, empty offices with their doors open. Two 40sish Chinese women stare at us, not sure why we’re there.
“Hi,” I finally say, “we’re looking for Bitfinex. Is this Bitfinex?”
The woman nearer speaks up. “What?”
“Uh…” I start using my hands like an idiot, pointing at the floor and all around, as though it’ll translate better, “Is this Bitfinex?”
Address 3: Room 803 K Wah Centre, 191 Java Rd., North Point
A Chinese woman, again in her 40s, again surprised to see two Westerners, opens the door enough to speak with us. Her English is perfect. “Hello, can I help you?”
“Yes,” I say, “we’re looking for Tether. This is the listed address. Is this Tether?”
She shakes her head no, “No, no.”
“I see, and do you work with Tether? Are they a client?”
With every question she seems more suspicious. “No,” she says, “I have never heard of Tether. Sorry. Have a nice day.” She shuts the door and walks away.
Source https://medium.com/@thecaspiancey/finding-finex-3eefac0d45a2
Also, what do you speculate would occur if Bitfinex, Ifinex and Tether were sentenced and ordered to remove all their stablecoins from the cryptospace? This might be a very dangerous situation we are in because Ifinex, Bitfinex and Tether might only be shell companies as reported in this article.
Address 1: Suite 13/F, 1308 Bank of America Tower, 12 Harcourt Road Central
When we get back to the first floor, we recheck all the signage and office listings to see if iFinex is anywhere to be seen. It isn’t. We ask the guards if there’s a iFinex somewhere in the building, perhaps unlisted. “No,” they tell us.
Address 2: Easey Commercial Building, Suite 1902, 253–261 Hennessy Rd., Wan Chai
J & C (HK) Business Limited is printed on the opaque window framed within the door. We knock and a faint voice says something in Cantonese. The tonality makes me think we’re welcome. Besides, door’s unlocked. Inside is a small office with a few desks, fluorescent lights, a water cooler, and a printer. In back are two even smaller, empty offices with their doors open. Two 40sish Chinese women stare at us, not sure why we’re there.
“Hi,” I finally say, “we’re looking for Bitfinex. Is this Bitfinex?”
The woman nearer speaks up. “What?”
“Uh…” I start using my hands like an idiot, pointing at the floor and all around, as though it’ll translate better, “Is this Bitfinex?”
Address 3: Room 803 K Wah Centre, 191 Java Rd., North Point
A Chinese woman, again in her 40s, again surprised to see two Westerners, opens the door enough to speak with us. Her English is perfect. “Hello, can I help you?”
“Yes,” I say, “we’re looking for Tether. This is the listed address. Is this Tether?”
She shakes her head no, “No, no.”
“I see, and do you work with Tether? Are they a client?”
With every question she seems more suspicious. “No,” she says, “I have never heard of Tether. Sorry. Have a nice day.” She shuts the door and walks away.
Source https://medium.com/@thecaspiancey/finding-finex-3eefac0d45a2
Also, if the real volume was only 6% of the reported volume, would this not be easier for the tether printers to manipulate the market?
i don't think so, and having a very low share of the market is not the only reason. the other and maybe even main reason is that bitcoin traders don't care about what bitcoin price is against some altcoin even if that altcoin has U.S.D. in its name like USDT. they instead care and look at bitcoin price in fiat. you'll never see a trader say bitcoin is worth 9700 tether so i should buy it at 9500 dollar before it goes up or sell it at 10000 dollar before it goes down.
this might have changed a little over the past 3 years that the media has been spoonfeeding everyone the same FUD but in the end the number of those who eat it up is very little. same as the previous FUD that started around 2010 and continued many years saying "China controls bitcoin".
@pooya87. You are correct! This is an old report created on March 20 2019, however, during the time it was made the reported volume for bitcoin was $6 billion and the real volume was $273 million. The ratio might also be similar today hehehe.
List of exchanges with real volume is mentioned in page 61.
In any case, the exchanges that gave real reports on bitcoin volume that use USDT were Binance, Bitfinex, Poloniex and Bittrex. I would not speculate that the volume for USDT was only on 2%, however. Binance and Bitfinex had much of the volume out of the 10 exchanges that had reported real volume.
Source https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf
Also, if the real volume was only 6% of the reported volume, would this not be easier for the tether printers to manipulate the market?
List of exchanges with real volume is mentioned in page 61.
In any case, the exchanges that gave real reports on bitcoin volume that use USDT were Binance, Bitfinex, Poloniex and Bittrex. I would not speculate that the volume for USDT was only on 2%, however. Binance and Bitfinex had much of the volume out of the 10 exchanges that had reported real volume.
Source https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf
Also, if the real volume was only 6% of the reported volume, would this not be easier for the tether printers to manipulate the market?
other tether volumes you see on sites such as coinmarketcap.com is the altcoin trading volume not bitcoin.
Tether has the highest trading volume, more than bitcoin, which implies that tether has become a dominating coin in the whole of cryptospace. i guess you missed the bold part.
by the way i am not denying that tether is dominating the market but the altcoin market not bitcoin market. most of the volume reported here (https://coinmarketcap.com/currencies/tether/markets) is either fake volume from shady exchanges or it is from altcoin volume against USDT. and when you want to discuss about "bitcoin price" and its future you can't use that are a reference.
@The Pharmacist. Bitfinex claimed that tether is backed 100% again. However, the evidence might only be snapshots on certain dates hehehe.
Source https://www.coindesk.com/tether-says-its-stablecoin-is-fully-backed-again
In any case, there are bull and bear tokens created by ftx.com. They are tokens based on a 3x leveraged position on bitcoin. The problem is the only markets available are paired with USDT. This cancels the idea of the bear token for The Big Short scenario hehehe.
Source https://www.coindesk.com/tether-says-its-stablecoin-is-fully-backed-again
In any case, there are bull and bear tokens created by ftx.com. They are tokens based on a 3x leveraged position on bitcoin. The problem is the only markets available are paired with USDT. This cancels the idea of the bear token for The Big Short scenario hehehe.
@bbc.reporter Tether has already admitted that their stable coins is not fully backed by dollars, and despite this revelation people have yet not stopped purchasing it which makes me wonder are they willingly allowing themselves to be scammed?.
Wow, I guess I haven't been following crypto news as closely as I should, because I didn't know that. Then again, stablecoins have always seemed superfluous to me. I get that they're supposed to be a stand-in for a fiat currency; I just question their necessity. And if any stablecoin is not being fully backed by the currency it's supposed to be backed by....yikes. I wouldn't want any part of that.Is there a mechanism by which you can short Tether? I wouldn't think of doing this myself, but I bet you that there could be a situation just like in the Big Short where only a few people are acknowledging that the emperor isn't wearing any clothes.
2016/17 was really an outlier, wasn't it? China, Tether, BCash "civil war".
Bitcoin's history is so short, nothing really qualifies as an outlier. I strongly believe that the underlying market conditions (bull market vs. bear market) determine whether fundamentals and news events matter. If the Bcash war or BTC-e collapse took place in the middle of a bear market following a blow-off top (like early 2014), they would have been much more bearish events.
By the same token, I don't think the Tether crisis of early 2017 caused the bubble either, but people panic buying out of USDT surely reinforced the bullish trend in BTC and altcoins and may have accelerated the whole affair.
Goodbye to stablecoins after that.
I'm honestly bullish on stablecoin proliferation. I think asset tokenization is a trend that will continue and stablecoins become really attractive in that context. I'm just not sure how long Tether will hold the crown.
It has ended for Big Short, Bitcoin has experienced Big Short and now the path for Bullish has been opened after Halving ends, if you see,
Altcoin is now experiencing an increase, XDCE, THETA, MBL etc. have experienced an extraordinary increase, maybe altcoin season will come
Altcoin is now experiencing an increase, XDCE, THETA, MBL etc. have experienced an extraordinary increase, maybe altcoin season will come
All Tether does is instantly convert to Tether when you "sell" your BTC. They are suppossed to do it automatically and instantly. What is the problem? What else would they do, not convert it?
I agree with that.If Tether goes down for some reason(including the good old "tether isn't 100% backed by USD" accusation),some other stablecoin will definitely conquer their market share,because the crypto traders want to convert their volatile coins into a stablecoin.I'm not a fan of Tether and stablecoins,but if there's a demand for such coins on the crypto markets,that demand should be covered.That's how the market economy works.
Anyway these two are already on the hot seat so let the investigation roll and for now it will be better to sit and watch what will happen before doing anything because we probably missed the truth and failed to know what will be the best action we can do. This concern is already on the hand of the authority and let's just hope whatever will be the outcome for sure it will be fair for everyone.
All Tether does is instantly convert to Tether when you "sell" your BTC. They are suppossed to do it automatically and instantly. What is the problem? What else would they do, not convert it?
I agree with that.If Tether goes down for some reason(including the good old "tether isn't 100% backed by USD" accusation),some other stablecoin will definitely conquer their market share,because the crypto traders want to convert their volatile coins into a stablecoin.I'm not a fan of Tether and stablecoins,but if there's a demand for such coins on the crypto markets,that demand should be covered.That's how the market economy works.
My friends and I have always joked about the "Tether printer." It's rather funny to see the recent Fed actions eliciting the same meme. Half-jokingly, it feels like they took one right out of Tether's playbook. 
brrrrr (or some similar haha) was trending on Twitter for days at some point last month!Yeah, I had my moments when I was completely immersed in Tether conspiracies too, specially around the time of Spoofy the magical super-trader entity, and then checking out all those Bitfinex'd posts. That was 2016/17 too. Got to really say all the things that were supposed to be bad news for Bitcoin actually turned out well for it. 2016/17 was really an outlier, wasn't it? China, Tether, BCash "civil war".
I think OP's whole point is Bitcoin right now in trading is heavily paired with USDT so basically if USDT got screwed in terms of its price it will pbviously affect Bitcoin's price so as other cryptocurrencies being paired with it. The crash in USDT will just result to these Tether hodlers to jump out and exchange every USDT they have and accept all sell orders in the market, prices will go down as a result. So if this is a potential big short I think exchanges need to act out and consider slowly removing USDT pairs in their platform.
Never held any USDT so will never have that worry but if what exstasie reminds happened in 2017, then this can only mean more BTC holders, possibly ETH if liquidity becomes a problem. Goodbye to stablecoins after that.
I think The Big Short took place in February, it was a strong dump that surprised the whole market and a series of traders suffered heavy losses. Now the halving event has taken place and its price will not be able to fall too much. miners need to be profitable so I think prices will be slightly adjusted after so many weeks of growth. I believe in the future the price of bitcoin will go up and maybe retest the old ATH - $ 20k in 2021.
If you want to use that analogy then the Big Short maybe took place in late 2017 when it rallied very quickly from $3K to $20K or so. In February there wasn't many people bearish, just the covid19 event took many by surprise.
The Big Short would mean that everybody is shorting the market right now, since people are losing jobs but the market is still rallying. Similar to how people were not paying their mortgages back in 2007 but the markets kept reaching new high anyways, then those 4 groups of people created a huge short against the mortgage markets.
So if history repeating itself, possibly so. There are many people who are betting that Covid19 gets worse before it gets better to profit. There are many so called default swaps out there which will increase in value if the markets crash again.
I think The Big Short took place in February, it was a strong dump that surprised the whole market and a series of traders suffered heavy losses. Now the halving event has taken place and its price will not be able to fall too much. miners need to be profitable so I think prices will be slightly adjusted after so many weeks of growth. I believe in the future the price of bitcoin will go up and maybe retest the old ATH - $ 20k in 2021.
Also, 70% of the total bitcoin trading in the cryptospace is made in USDT. This is an old source, however, I reckon the % might be close to similar at this moment.
@exstasie. Is this really fud,
considering that your percentage is a total nonsense and your title is also a bigger nonsense (Big Short is about the corruption of banks and how they have the economy in the palm of their hands, something that doesn't exist in bitcoin world), yes it is FUD.
Coinbase (100% fiat exchange) has ~35% of total volume
Bitstamp (100% fiat exchange) has ~22% of total volume
Bitfinex (both fiat and tether) has ~17% of total volume -> 89.5% ($22.04 mil) in fiat and 10.5%($2.61 mil) in tether
Kraken (both fiat and tether) has ~16.5% of total volume -> 99% ($60.05 mil) in fiat and 1% ($0.5 mil) in tether
gemini (100% fiat exchange) has ~4.5% of total volume
bit-x (100%(?) fiat exchange) has ~3.5% of total volume
the rest are too small to be counted (~2% among 10+ exchanges).
that means the total bitcoin trading in USDT is only 10.5%*17% + 1%*16.5% = 1.95% or merely 2%.
other tether volumes you see on sites such as coinmarketcap.com is the altcoin trading volume not bitcoin.
data is taken from https://data.bitcoinity.org/markets/volume/30d/USD?c=e&t=b and https://coinmarketcap.com/currencies/bitcoin/markets
The list of bitcoinity.org is very incomplete hehehe. It does not cover all the trading volume of USDT and fiat for bitcoin.
Check listed pairs in coinmarketcap.com. I reckon this tells us that USDT volume is clearly more than 2% of the total volume.
https://coinmarketcap.com/currencies/bitcoin/markets
Also, check total volume of all cryptocoins. Tether has the highest trading volume, more than bitcoin, which implies that tether has become a dominating coin in the whole of cryptospace.
https://coinmarketcap.com/
Jump to: