Topic: What'll happen when USDT collapses? - page 2. (Read 2022 times)

Amen to that... .

There are two outcomes pretty much. Tether turns out to be absolutely and provably fine and is mysteriously allowed to carry on existing, or it turns out to be what many suspect it to be and implodes or is shut down by The Man.

Both outcomes are fine with me. I'd prefer an orderly and non harmful version of the latter myself. Bitfinex is pretty much the final significant holdout of bitcoin's wild west phase and it's safe to say that despite it getting us to where we are today it's not good enough any more.

I'm rather gobsmacked that bitfinex managed to stay right up there despite everything they've inflicted on everyone.

The source of incomplete information is themselves. The "Huge" traders are also themselves. And if you don 't believe their current story, they will soon have to invent another one... . And they are not fearing a sell-off, but rather a "Move out".

What do you think about this comment on Reddit? While saying "to bring down the entire market" may be a bit exaggerating, there are accurate facts still. Bitfinex is a so suspicious platform since their hack long back and I won't be much surprised if it's turn out to be true.

https://www.reddit.com/r/Tether/comments/6yammo/tether_has_the_potential_to_bring_down_the_entire/

Basically all of this is based on conjecture.

What is conjecture?

-an opinion or conclusion formed on the basis of incomplete information.


Like Bitfinex mentioned in their tweet, all of this panic to start a sell-off of BTC and apparently its working causing nothing but panic and fear.


Keep in mind Bitfinex make like $2 million A DAY in trading fees alone. They got huge traders. These traders obviously are still trading on their platform daily and aren't worried.  If they were scared, their volumes would drop and they would move to other exchanges.

It is in any case overrated. Bitfinex can go down as a whole, so what? we have plenty of exchanges out there nowadays. If it crashes, it will be a very fast dip that will get bought by people that aren't complete idiots and understand it's irrelevant.

Somebody has found new information on this btw, seems to be linked to some Polish bank; Google "CRYPTO SP. Z O.O." and "Molina Lee Ivan Manuel".

USDT does appear to be a derivative with USD as the underlying. i believe such instruments require formal registration with the CFTC. and they've been serving US customers for years, so that'll probably amount to a stiff civil penalty when all of this finally explodes.

the way i see it, the tether debacle is only one of multiple big problems that bitfinex has:

1) no banking
2) BFX tokens = unregistered securities issued to/traded by US customers
3) USDT = unregistered derivatives issued to/traded by US customers
4) bitfinex operated as an unlicensed money transmitter in the US since 2013

i see very bad things coming for bitfinex. three letter agencies will be involved IMO. i really don't think btc-e was the last unlicensed exchange that will be brought down.

and why not? they can hand the exchange/broker industry to big wall street players and auction off the seized BTC to rich banksters. everything happens for a reason.....

Thank you for this info.

I am always converting coins into USDT when waiting for another trade. I think the OP is right, The USDT is created from nowhere and become the basis of BTC - USD exchange rate under their control. Tether (USDT) is not the real dollar because it is not backed by the US government. the US government might sue them later on.

I think this is missing the bigger picture. Tether = Bitfinex: it is majority owned by Bitfinex's parent company.

So when we talk about Tether collapsing, we need to talk about how the entire circulating supply of USDT represent Bitfinex liabilities. Most of its supply was inflated after Bitfinex lost its ability to send/receive wires. That's probably margin profits exiting Bitfinex onto other platforms (like Poloniex).

You might associate these "toxic assets" with altcoin exchanges, but they are Bitfinex's liabilities. It's funny because Bitfinex can't even wire people USD, but they are the highest volume BTCUSD exchange. Go figure. Anyway, I don't see how we can deny the effect on BTC there.....

Tether is a scam
Bitfinex is also a scam. Do not believe anyone that says the opposite.

Bitifinex has serious problems so no fiat deposits and withdrawals are possible. That makes it a crypto to crypto exchange and any finex-usd credited in a bitifinex account is pure air not even thether (usdt). If someone sends cryptos to finex and sells for finexusd the only way to withdraw the finexusd is by buying back cryptos at higher prices probably. So finex has the potential to manipulate the price of btc and other cryptos because finex has an infinity amount of finexusd that can use to stop a dip or increase the price of any crypto that supports (manipulates in any direction in my opinion, most probable upwards).
Tether(usdt) is used for making some withdrawals out of finex possibly but is also used by other exchanges for market making in order to follow the prices that finex make for the cryptos that supports.

If usdt is not redeemable for real usd then it does not mater if there are 670M usd sitting in several accounts. THIS IS NOT BACKING USDT BY REAL USD.
Assume that someone makes an arrangement with a bank to lend him some millions of usd without even moving the funds out of the bank and this person then issues usdt and makes huge profits and pay back the bank's interests (5% at most per year, nothing compared to the potential profits) then this does not make the usdt backed by usd because if someone owns usdt can not redeem them for real usd directly but has to sell the usdt for some other cryptos and then sell the cryptos for fiat in fiat<=> crypto exchange.

In conclusion:
1)the tether/finex scam has issued 670M usdt that the majority thinks wrongly that can be redeemed for real usd
2)finex has issued finexusd in order to keep the exchange running
In my opinion these actions have the result that the total market cap of the btc+altcoins has been inflated with more than 100B $. When finex and tether stop operating firstly a very short uptrend will probably occur by people starting to sell tether for cryptos then a long term down trend will occur because there would be no finex to absorve the panic sell and to support the inflated prices. A long term correction of 60-70% is very possible.

Stay away from Bitfinex, Tether(usdt), Poloniex, Bittrex and any other exchange that uses Tether (usdt)

One rather rapid call utilising one's telephone would clear that particular issue up with the greatest of rapidity. I really struggle to believe anyone's that stupid or crooked.

Tether appeared to be fairly legitimate as of a year ago. Lots of people used it to arbitrage the markets, they had a standard KYC process and standard bank wire service.

It wasn't until March of this year -- when both Bitfinex and Tether lost banking capabilities -- that things started to get really fishy. For one thing, did they "lose banking capabilities" or are they insolvent? We'll never know, and while Friedman LLP has apparently looked at Tether's books, their statements don't confirm that Tether has access to funds backing all USDT in circulation.

The "theft transaction" narrative seems unnecessary, since nobody can withdraw USD from Tether (or Bitfinex), and they haven't been able to for many months now. Then again, who would be dumb enough to bother hacking Tether? It's centralized; they can just freeze your funds and/or fork the network.

Correct, but on the other hand, we can't discard the most of the times greatly exaggerated panic reaction of the Bitcoin market on any happening with a negative tint to it. People trading whatever crypto coin against Tether are exposing themselves to greater risks than people who are just trading without Tether. You don't only depend on the exchange to keep performing, but you also depend on Tether itself to not mess up. It's impossible to deny the advantages that Tether offers in times where exchanges have to abide by all sorts of regulations, but it should be clear that you once may end up having sold your precious Bitcoins for worthless tokens. Better safe than sorry, I always say.

Are BTC meant to be sold?

That is irrational thinking. MarketCap means not much. Do you think "all" Bitcoins can be sold for 8k$? I guess not.
A better metric would be the average price paid per BTC - you can move the market alot with 20 million$, if done right.

Do not think so. There are only $600 m USDT. It is much smaller than the Bitcoin market cap.

what do you think is possible regarding BTC price in a shallow orderbook with >100Mio tether on margin trading (fact) ?
did you ever wondered how, after a sudden 25% drop a super green candle out of the nowhere appears?
bitfinex wants BTC price to rise...its just free money for them

A potential "thethering" is greatly exaggerated in in my opinion. If it really collapses, then the altcoins will suffer a lot more than BTC. USDT is a gateway way more important for altcoins than for BTC. The altcoin holders may dump for BTC in the danger for an USDT collapse.

This is not 2013 anymore where everything was sitting on a single point of failure. It's really stupid how people compare an USDT collapse to Mt Gox 2.0. These people are deliberately FUDding in hopes of buying a good dip.

Interesting, that 's the least we can say. And it would be more interesting if some courageous journalists would dig a bit further : Bitfinex, Gox, Stamp, Ifinex, BTC-e... . Who actually are the owners of Ifinex ?

Just a few thoughts regarding the USDT:

I] - I suppose everybody read this by now: https://www.coindesk.com/tether-claims-30-million-stable-token-stolen-attacker/
II] - Tether is worth 673 M USD at the current price it's 81219 BTC - https://coinmarketcap.com/currencies/tether/
III] - Tether is "audited" by somebody reputable who actually said it was not an audit but something like "an opinion" (last time I heard this was during the defense of rating agencies after the 2008 CDO/CDS fraud).
IV] - For those who don't remember - when the fraud is big enough even auditors are happy to get their hands dirty - lookup Arthur Andersen and Enron scandal (60+ billion was lost almost overnight in a fraud in year 2000 money ~ easily 600+ billion in today's money).

I don't like baseless panic and FUD but I think there is something smelly about USDT like the OP said - I'm not sure what or how but it doesn't add up.

Is there a way to independently check how many USDT is actually out there?

Is it possible that somehow there is fake fiat aka USDT (wow double fake) buying crypto and artificially pushing the price up? My biggest concern is that there might be 10x or 100x more USDT than they actually report.