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The Tethers (USDT) Thread
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<blockquote data-quote="SamuelBRoberts" data-source="post: 1153168" data-attributes="member: 8362"><p>The tethers thing looks close to blowing open.</p><p></p><p>I'm overworked (it's 7:00 AM where I'm at and I'm probably not gonna get done working until evening) so I don't have time to get into detailed discussions of this, and I particularly don't have time to deal with JJG-style word swamps, so I may not be able to discuss it too deeply, but it's something that I think members should be aware of. I'll just list things really quickly.</p><p></p><p>1. Bitcoin's huge price rise really started earlier this year, around the time a major exchange, Bitfinex, lost their banking. </p><p>2. Bitfinex is also responsible for the issuance of a type of currency called "tethers", which most traders on this forum have probably used. </p><p>3. Tethers are a crypto that is supposedly "backed" by dollars, that is, each individual tether can in theory be redeemed for one dollar from a bank account owned by Bitfinex's tether inc. subsidiary. </p><p>4. <strong>Tethers are not actually backed by dollars. They're not backed by anything.</strong> It is impossible to redeem tethers for real money. Nobody ever tries, everyone just assumes that you can. The bank account where the "backing" dollars are may not even exist. Tether claims daily audits, but there was one very poorly done audit of it over the course of months, that failed to verify much of anything.</p><p>5. The implications of this are obvious: Bitfinex has a supply of infinite money that they can use whenever they want at no risk to them. Want to buy some more bitcoin? Just create some more tethers!</p><p>5. Bitfinex corp also trades on its own exchange, and thus has access to information ordinary users don't. (They can see hidden orders, for instance.) They can also wash trade with impunity, for instance, because who's going to catch them? They own the exchange!</p><p>6. So you have a malicious actor with access to information that ordinary people don't have and a supply of free money. What would someone like that try to do? The same thing the Fed wanted to do with "quantitative easing", drive prices up as high as possible. What have we seen with bitcoin? Prices being driven up as high as possible. </p><p>7. Ever noticed how how bitcoin will sometimes have these massive pumps that make no real sense, right after a huge drop? Not ordinary bounces, massive green candles that are FAST? Ever ask yourself "What idiot is doing these huge market buys?" Well, it's not an idiot if they're paying with fake tethers. </p><p></p><p><strong>There is good reason to believe that a large amount of Bitcoin's price rise over the last year is due to Bitfinex and their tethers. When the tether scam is stopped, expect the bitcoin price to crash. The scam is starting to get more attention, and I believe that in the next few months it will blow up</strong></p><p></p><p><strong>COMMON OBJECTIONS:</strong></p><p>Objection: Bitcoin's price is going up because everybody is buying it! My aunt/uncle/guy at work etc. are all buying bitcoin!</p><p>Answer: Yes, they're buying because the price is on a massive uptrend, and the reason the price is on a massive uptrend is that any time it starts to go down, tethers come along and save the day. What happens when teh</p><p></p><p>Objection: Big institutional money is coming into Bitcoin. JP Morgan is buying, etc.!</p><p>Answer: Same as above.</p><p></p><p>Objection: There are only 648 million tethers in existence, and Bitcoin's marketcap is god-knows-how-many billion! Tethers can't possibly be affecting the price that much when they're less than 3% of Bitcoin's marketcap!</p><p></p><p>Answer: This question reflects a fundmental misunderstanding of how marketcap works. Marketcap is price * circulating supply, but the circulating supply doesn't reflect how much of a coin is actually available to purchase. Bitcoin's circulating supply is about 15 million, I think, but only a tiny amount of that is on exchanges at any one time, and it's that tiny amount that determines the price. For instance, a while ago 27 million in purchases was enough to send BTC's price up 300$, adding billions to its marketcap. </p><p></p><p></p><p></p><p>If any of this is unclear, I will happily take questions from anyone who is not JJG, because there's just not enough hours in the day to even figure out what the hell JJG is saying in his posts, let along answer them.</p></blockquote><p></p>
[QUOTE="SamuelBRoberts, post: 1153168, member: 8362"] The tethers thing looks close to blowing open. I'm overworked (it's 7:00 AM where I'm at and I'm probably not gonna get done working until evening) so I don't have time to get into detailed discussions of this, and I particularly don't have time to deal with JJG-style word swamps, so I may not be able to discuss it too deeply, but it's something that I think members should be aware of. I'll just list things really quickly. 1. Bitcoin's huge price rise really started earlier this year, around the time a major exchange, Bitfinex, lost their banking. 2. Bitfinex is also responsible for the issuance of a type of currency called "tethers", which most traders on this forum have probably used. 3. Tethers are a crypto that is supposedly "backed" by dollars, that is, each individual tether can in theory be redeemed for one dollar from a bank account owned by Bitfinex's tether inc. subsidiary. 4. [b]Tethers are not actually backed by dollars. They're not backed by anything.[/b] It is impossible to redeem tethers for real money. Nobody ever tries, everyone just assumes that you can. The bank account where the "backing" dollars are may not even exist. Tether claims daily audits, but there was one very poorly done audit of it over the course of months, that failed to verify much of anything. 5. The implications of this are obvious: Bitfinex has a supply of infinite money that they can use whenever they want at no risk to them. Want to buy some more bitcoin? Just create some more tethers! 5. Bitfinex corp also trades on its own exchange, and thus has access to information ordinary users don't. (They can see hidden orders, for instance.) They can also wash trade with impunity, for instance, because who's going to catch them? They own the exchange! 6. So you have a malicious actor with access to information that ordinary people don't have and a supply of free money. What would someone like that try to do? The same thing the Fed wanted to do with "quantitative easing", drive prices up as high as possible. What have we seen with bitcoin? Prices being driven up as high as possible. 7. Ever noticed how how bitcoin will sometimes have these massive pumps that make no real sense, right after a huge drop? Not ordinary bounces, massive green candles that are FAST? Ever ask yourself "What idiot is doing these huge market buys?" Well, it's not an idiot if they're paying with fake tethers. [b]There is good reason to believe that a large amount of Bitcoin's price rise over the last year is due to Bitfinex and their tethers. When the tether scam is stopped, expect the bitcoin price to crash. The scam is starting to get more attention, and I believe that in the next few months it will blow up[/b] [b]COMMON OBJECTIONS:[/b] Objection: Bitcoin's price is going up because everybody is buying it! My aunt/uncle/guy at work etc. are all buying bitcoin! Answer: Yes, they're buying because the price is on a massive uptrend, and the reason the price is on a massive uptrend is that any time it starts to go down, tethers come along and save the day. What happens when teh Objection: Big institutional money is coming into Bitcoin. JP Morgan is buying, etc.! Answer: Same as above. Objection: There are only 648 million tethers in existence, and Bitcoin's marketcap is god-knows-how-many billion! Tethers can't possibly be affecting the price that much when they're less than 3% of Bitcoin's marketcap! Answer: This question reflects a fundmental misunderstanding of how marketcap works. Marketcap is price * circulating supply, but the circulating supply doesn't reflect how much of a coin is actually available to purchase. Bitcoin's circulating supply is about 15 million, I think, but only a tiny amount of that is on exchanges at any one time, and it's that tiny amount that determines the price. For instance, a while ago 27 million in purchases was enough to send BTC's price up 300$, adding billions to its marketcap. If any of this is unclear, I will happily take questions from anyone who is not JJG, because there's just not enough hours in the day to even figure out what the hell JJG is saying in his posts, let along answer them. [/QUOTE]
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