Why did not the price go up with the announcement of Tether?

o_e_l_e_o

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Quote from: figmentofmyass on November 07, 2018, 12:16:28 AM

at the end of the day though, USDT should trade near $1 as long as bank wires are flowing. as long as withdrawals from tether are possible, arbitragers will buy underpriced USDT across the market and withdraw it.

That's the problem though. USDT will trade near $1, until it suddenly doesn't. And when it doesn't, it will crash hard, and anyone still holding Tether will be left bag holding and trying to sell at a fraction of its cost. And we don't know when that day will come because they are still refusing an audit.

They last pulled yet another $50 million out just over a week ago, bringing its total drop in marketcap to over $1 billion now. Their shady practices and unknown amount of funds won't last much longer. It won't be long before it's out of the top 10, which would be a good thing if it wasn't going to be replaced in the top 10 by TRON - an equally shit and shady coin.

figmentofmyass

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Quote from: wuvdoll on November 06, 2018, 09:54:36 AM

Basically people lost faith in tether totally. There is no way tether could make a comeback because tether is right now known as scammers and value zero in real life. It is not dollars, it is not fiat, it is just a token symbolizing it.

people haven't lost faith. you can tell because it's still trading at $0.99 and USDT markets are still huge across the trading ecosystem.

there's always gonna be legit concerns about tether and bitfinex because of their shady banking practices, operating out of tax havens and through shell corporations. bitfinex founder giancarlo once said "we’re not criminals, but now we have to learn to bank like criminals." inevitably, there's always some worries about their practices and viability.

at the end of the day though, USDT should trade near $1 as long as bank wires are flowing. as long as withdrawals from tether are possible, arbitragers will buy underpriced USDT across the market and withdraw it.

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rodalutor

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That letter doesn't really prove anything, it could easily have been forged. Even then I think most won't have seen that news and that most of the market aren't really that concerned about Tether. I feel like it's one of these reasons that people came up with while searching for reasons for the crash and just stuck with it because it kind of fit.

wuvdoll

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Basically people lost faith in tether totally. There is no way tether could make a comeback because tether is right now known as scammers and value zero in real life. It is not dollars, it is not fiat, it is just a token symbolizing it.

Hence, naturally people realized they do not hold dollars, they are holding a token and turned it into bitcoin which has a real value. They may come up and say they own trillions of dollars and prove it all I care, I will still not trust them. Now ripple was disliked as well at the early days but they kept pushing hard and became a strong coin, I still hate ripple but they are at least proving that they will not go down without a fight. Same with bitcoin cash, I hate it but its still around. Same could happen with tether if they hang around but I hope it won't.

o_e_l_e_o

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The wording of the letter seems suspicious to me as well. The phrase "portfolio cash value" is very ambiguous. Why didn't they say "your account has a balance of", or something to that effect. "Portfolio cash value" means the value in cash if your entire portfolio was converted to cash. That portfolio could include anything - cash, bonds, stocks, property, gold, even cryptocurrency. If I hold a million Tether, and 1 Tether = 1 USD, then my "portfolio cash value" would be $1 million. Although true, it tells you absolutely nothing about whether I actually have enough cash to back up my claims.

The additional fact that they have then said "solely based on the information currently in our possession" again makes it seem like Tether have told this bank we are holding assets x, y and z which are totally worth $1.8 billion dollars. Whether x, y and z are in fact worth that, we have no way of knowing, because they still won't permit an audit to be performed.

Honestly, the whole thing is so incredibly shady that I'm glad I sold all my Tether before this blew up and I won't be buying more again.

figmentofmyass

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Quote from: o_e_l_e_o on November 05, 2018, 05:10:29 PM

Honestly, I find this even shadier than Tether already is. A pretty much unheard of bank located in a tax haven releases a statement that looks like it was written by a child. Have you guys seen the statement (linked below)? If something that looked like this showed up in my emails, I would immediately delete it because I would think it was a scam. It could be thrown together by literally anyone in under 10 minutes. My favorite part is the sign off - no names and an illegible signature so no one can be held personally accountable. Real professionalism in action there.

This isn't even remotely similar to an audit, which they are still refusing.

https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf

haha, never noticed there was no actual signatory. the signer signed as the bank itself! that's incredibly unprofessional. i've never seen that in all my years.

still, deltec is at least a legitimate, licensed bank: http://www.centralbankbahamas.com/legal_licenses.php?cmd=searchresults&page=8

so i'll give them the benefit of the doubt for now. as long as the bank wires are flowing, i've got no complaints.

i don't think we'll ever get an audit. their legal counsel said a while back that the big four auditing firms won't touch them. this is the best we're gonna get.

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Quote from: vit05 on November 03, 2018, 12:04:35 PM

Tether has formally announced its agreement with a bank in the Bahamas 2 days ago. This bank demonstrated that Tether has all the monetary reserves necessary to backed the value of 1 dollar per token. I think there was something wrong with them, since in the last weeks they have greatly diminished the circulating tokens by burning some. But today it is proven that the dollars are insured in a bank. This was one of the biggest fears that USDT was just dust.

Would it not be right to expect the price to rise?

Bitcoin won't go dead I guess you have came across, some prediction of the the price to go higher which in order words they are just prediction of FUD.

o_e_l_e_o

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Honestly, I find this even shadier than Tether already is. A pretty much unheard of bank located in a tax haven releases a statement that looks like it was written by a child. Have you guys seen the statement (linked below)? If something that looked like this showed up in my emails, I would immediately delete it because I would think it was a scam. It could be thrown together by literally anyone in under 10 minutes. My favorite part is the sign off - no names and an illegible signature so no one can be held personally accountable. Real professionalism in action there.

This isn't even remotely similar to an audit, which they are still refusing.

https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf

(In case the original is removed, click for full size)

figmentofmyass

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Quote from: vit05 on November 03, 2018, 12:04:35 PM

Tether has formally announced its agreement with a bank in the Bahamas 2 days ago. This bank demonstrated that Tether has all the monetary reserves necessary to backed the value of 1 dollar per token. I think there was something wrong with them, since in the last weeks they have greatly diminished the circulating tokens by burning some. But today it is proven that the dollars are insured in a bank. This was one of the biggest fears that USDT was just dust.

the effect of tether on price is counterintuitive. when bitfinex and tether have banking problems, it can actually drive price upwards. since people can't withdraw fiat currency from bitfinex or tether, they need to buy bitcoin or other crypto to exit the exchange. since bitfinex is one of the highest volume exchanges and therefore leads, other exchanges tend to follow. by the same token, once fiat withdrawals are back online, some traders who exited bitfinex via BTC during the FUD come back and dump their coins again.

the drop in circulating supply makes sense since people have been unable to reliably withdraw from tether for the last couple months. now their bank is working through the backlogs and sending out wires---the corresponding USDT gets burned.

vit05

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Quote from: DDAsics on November 03, 2018, 03:49:27 PM

Tether didn't prove anything other than they have $1.8 billion in an account. There is no guarantee from the bank that the money will stay in the account for any length of time or where it came from. It could be a short term loan for all we know. There is also no guarantee that the money is not encumbered by some other financial derivative.

I have not thought about it. I do not know the legal aspects of derivatives of that jurisdiction, but that seems to me to be more of a bank matter than Tether. In the letter, the bank states that the portfolio is equivalent to such a value, but does not discriminate the formation of this portfolio.

Could this portfolio include other non-cash assets? Or maybe loans?

DDAsics

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Tether didn't prove anything other than they have $1.8 billion in an account. There is no guarantee from the bank that the money will stay in the account for any length of time or where it came from. It could be a short term loan for all we know. There is also no guarantee that the money is not encumbered by some other financial derivative.

In short, it is an interesting data point, but it is far from proof. The only thing that would truly prove the money is there to back Tether is a complete audit, and that is something Tether is still steadfastly refusing. Most people are still wondering why, bank letter or no bank letter. This will likely change the narrative though, and may stop the bleeding for a short while.

Don't expect it to do anything about the rest of the crypto market though. I'm not even sure it will help Tether. It is still too sketchy.

damar09

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Quote from: vit05 on November 03, 2018, 12:04:35 PM

Tether has formally announced its agreement with a bank in the Bahamas 2 days ago. This bank demonstrated that Tether has all the monetary reserves necessary to backed the value of 1 dollar per token. I think there was something wrong with them, since in the last weeks they have greatly diminished the circulating tokens by burning some. But today it is proven that the dollars are insured in a bank. This was one of the biggest fears that USDT was just dust.

Would it not be right to expect the price to rise?

I want it too tether up prices and maybe starting next month will increase although the meter has nothing to do with bitcoin however, it can rise up to tether with the new agreement, it is likely that the price of tether will increase I am optimistic about that

LeGaulois

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Got it... The news is very fresh perhaps we need to wait some days to see a potential result ( a week?). It's currently the weekend, only the bots are trading on weekends. Not a lot of people are aware of. The bank is maybe not taken seriously too, and I honestly don't at the first look of its website.

vit05

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Quote from: LeGaulois on November 03, 2018, 12:32:57 PM

Because there is no relation between Tether and Bitcoin See this topic I posted a while back Tether Has No Real Impact on Bitcoin price https://bitcointalksearch.org/topic/m.46075593 (There is an academic study by a university researcher debunking the claims. It used VAR model (Vector autoregression) The study claims there is not any strong evidence between Thether and the Bitcoin's rally in 2017) People were maybe waiting for another bank that one located in The Bahamas lol .....

My question is more related to the psychological aspect. There was uncertainty and fear that the Tether could be imploded and several exchanges would encounter liquidity problems. It would be catastrophic.

Proved that dollar reserves exist, investors would have a bit more security and could invest more.

This study is very interesting, but it proves that there was no bubble and that prices had not inflated by Tether/Bitfinex. That is, this study plus the reserves in this bank, some reaction we should have observed in the market.

But. of course, this bank may not be reliable and this is the reason for price stability.

LeGaulois

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Because there is no relation between Tether and Bitcoin See this topic I posted a while back Tether Has No Real Impact on Bitcoin price https://bitcointalksearch.org/topic/m.46075593 (There is an academic study by a university researcher debunking the claims. It used VAR model (Vector autoregression) The study claims there is not any strong evidence between Thether and the Bitcoin's rally in 2017) People were maybe waiting for another bank that one located in The Bahamas lol .....

vit05

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Tether has formally announced its agreement with a bank in the Bahamas 2 days ago. This bank demonstrated that Tether has all the monetary reserves necessary to backed the value of 1 dollar per token. I think there was something wrong with them, since in the last weeks they have greatly diminished the circulating tokens by burning some. But today it is proven that the dollars are insured in a bank. This was one of the biggest fears that USDT was just dust.

Would it not be right to expect the price to rise?

Topic: Why did not the price go up with the announcement of Tether? (Read 281 times)