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does any1 actually believe the tethers are adequately backed up by $$
Poast new message in this thread
Date: January 19th, 2018 5:06 PM Author: razzle death wish jap (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191538) |
Date: January 19th, 2018 5:07 PM Author: ebony arousing twinkling uncleanness business firm They very clearly aren't hardly at all (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191547) |
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Date: January 19th, 2018 5:11 PM Author: Carmine odious newt boltzmann Of course they are not...What kind of mouth breather thinks they can actually trade them in for dollars? (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191592) |
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Date: January 19th, 2018 5:12 PM Author: naked magical pocket flask Date: January 19th, 2018 4:58 PM Author: Wilbur "big dog" Mercer (Short Pride World Wide)
who cares
(http://www.autoadmit.com/thread.php?thread_id=3864788&forum_id=2#35191463) |
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Date: January 19th, 2018 5:24 PM Author: Stimulating principal's office sandwich (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191684) |
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Date: January 19th, 2018 5:30 PM Author: naked magical pocket flask (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191719) |
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Date: January 19th, 2018 5:15 PM Author: Passionate grizzly queen of the night lodge Don't know. Could be. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191629) |
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Date: January 19th, 2018 5:17 PM Author: Carmine odious newt boltzmann Bitfinex created a product that costs $1...People purchase that product when they don't want to lose money when they're not watching the market. They can then sell that product to other people who don't want to lose money when they're not paying attention.
Suddenly so many monetary experts out there these days, who can throw up a blog post and get 1,000,000+ hits |
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Date: January 19th, 2018 5:22 PM Author: razzle death wish jap what if sellers of bitcoin decide they no longer want to accept tethers for payment (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191668) |
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Date: January 19th, 2018 5:23 PM Author: Carmine odious newt boltzmann Then the tether holders are fucked..Personally not a risk I want to take, which is why I don't buy tethers (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191682) |
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Date: January 19th, 2018 5:25 PM Author: razzle death wish jap wouldn't tether holders being fucked collapse the entire market considering there are now $100s of millions in tethers (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191687) |
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Date: January 19th, 2018 5:30 PM Author: Carmine odious newt boltzmann It would collapse the market if it causes a loss of confidence in the system, and people run for the exits. The tethers being worthless has nothing to do with the price of Bitcoin.
It is my belief that enough people know tethers are garbage that it would not be a significant (near deadly) blow to the market. |
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Date: January 19th, 2018 5:34 PM Author: razzle death wish jap if enough people know that then why do they seem to need to create like half a billion of them a week? I am just trying to figure out what is going on here. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191751) |
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Date: January 19th, 2018 5:41 PM Author: Carmine odious newt boltzmann Because there's a market for a product that allows you to keep your crypto money safe from violent market swings dependent on the mood of the South Korean government.
As the crypto market grows, more tethers are needed to meet demand. |
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Date: January 19th, 2018 5:47 PM Author: razzle death wish jap yes...but how does that jibe with your idea that enough people know they are bullshit, new ones are being issued at a faster rate than the overall crypto market is growing (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191835) |
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Date: January 19th, 2018 5:54 PM Author: Carmine odious newt boltzmann They genuinely serve a useful purpose. They provide value, so people use them. Whether or not people know the reality of their monetary backing, is another question altogether. It would be nice if everyone was on the same page..But it's almost a moot point, as long as a large percentage of tether holders doesn't demand to exchange for dollars at the same time. And then FUD the entire internet when their orders aren't filled...The entire USDT thing is way overblown. There are more serious issues in terms of people not knowing what they're investing in. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191902) |
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Date: January 19th, 2018 5:34 PM Author: Histrionic home I wonder how many holders of tethers, which has the symbol USDT, think that they are holding actual dollars. Over 50%? (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191747) |
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Date: January 19th, 2018 5:43 PM Author: naked magical pocket flask lol no
the type of people using Tethers are probably informed of these risks |
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Date: January 19th, 2018 6:01 PM Author: Hot dashing corner This whole discussion is kinda dumb. It’s ljke asking what would happen if everyone transferred their coins to Coinbase or Gemini and all cashed them in for fiat at the same time. They don’t have the backing to do so. Neither does your local bank in fiat. It’s not gonna be an issue in my opinion. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191957) |
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Date: January 19th, 2018 6:17 PM Author: ruddy concupiscible menage The problem that arises is the scale of issuing Tether. It's up to $600M this month. Are we supposed to live with $1B of USDT being issued every month now? What if they move it to $3B/month? Is that OK?
Especially since the number of USDT being issued has increased exponentially in the past few months. |
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Date: January 19th, 2018 10:51 PM Author: Racy Red Keepsake Machete Days. $300 million just today. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35193680) |
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Date: January 19th, 2018 10:58 PM Author: Carmine odious newt boltzmann They have to maintain price at $1...When demand rises, the only way to stabilize price is increase supply. Simple economics. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35193729) |
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Date: January 19th, 2018 11:17 PM Author: cracking amethyst hominid the concern is that USDT has no utility value and no potential growth prospects (by construction). its only source of value is the market’s trust that it’s backed by the dollar 1:1. so even if demand increases and bids the price up, the new supply should be backed by new dollars, and if bittrex doesn’t have the dollars to back it up then they shouldn’t be issuing a cryptocurrency which they claim has guaranteed backing in the first place. the new demand wouldn’t be there without the market’s trust that any new issuances are backed up 1:1.
tbh i think some leverage would be fine but if they’ve said that each USDT is backed 1:1 then the market would probably react if it came out that this wasn’t the case. and this market is at much greater risk for a bank run than the banking system on top of that. |
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Date: January 19th, 2018 11:27 PM Author: Carmine odious newt boltzmann Agreed, that it's not an ideal practice..But the systemic risk is very small when you take into account the percentage of people who are in the market solely because they believe they can cash their tethers for $$. And the likelihood of all of those people finding out the truth at the same time, enough to cause a mass exodus, makes it nearly impossible that this would crash the market.
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Date: January 19th, 2018 11:39 PM Author: cracking amethyst hominid again i think it probably would have been fine if they allowed for some leverage and said “USDTs are backed by dollars” rather than saying specifically that “USDTs are backed by dollars 1:1” but now the market for USDTs is built on trust in the 1:1 guarantee. if that trust is erased, even if only because it comes out that bittrex used an arguably reasonable amount of leverage to support USDTs, then the market will react, to varying extents depending on the extent of the leverage. nobody expects to “cash in” their USDTs for dollars but if the 1:1 foundation for the USDT is shown not to have been followed then the basis for the market is undone and the market collapses. the risk really isn’t in the extent to which USDTs are misvalued with respect to the dollar but in the possibility that it triggers a run. and it’s of course more likely than not that the market would find out all at once, just because that’s how news spreads. i haven’t examined the volumes closely enough to think about how large the effect would be. but if trust in the tether is erased then the $ in tethers will be withdrawn from exchanges to be put into USD. in principle there is real risk here. |
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Date: January 19th, 2018 6:06 PM Author: Carmine odious newt boltzmann How many hits will this whole thread generate? Xoxo has cracked the tether case. Someone tweet it out, so the internet can stfu about this. (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35191987) |
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Date: January 19th, 2018 6:09 PM Author: maize coiffed nursing home amazing how many people know to tether down BEFORE a dip
https://coinmarketcap.com/currencies/tether/historical-data/?start=20171019&end=20180119
Thats whats really creating the extra money here. Oh you had $200k before the dip and $200k during the dip instead of $120k had you not tethered down? And then you used your $200k to buy more and end up with $300k after the dip? Ok.... |
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Date: January 19th, 2018 6:14 PM Author: Carmine odious newt boltzmann As long as you can find someone else to buy them for $1 and pay you Bitcoin, it doesn't matter. They provide value, so people seem to want to buy them.
If you tether down and the price goes up, then you lose money. This is how trading works. |
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Date: January 19th, 2018 6:27 PM Author: Snowy Den Travel Guidebook It is possible, although I wouldn't be surprised if Tethers is in fact running a massive fraud. Under the scheme outlined in the blog posted in another thread, I can see a path that would lead to a real $1 backing each Tether. See http://jamescrypto.com/evidence-is-mounting-that-much-of-the-value-in-btc-may-be-artificial/
Say for arguments sake that Tether's first 100 million coins were in fact backed by real dollars (I think that Tethers first issuances are key as to whether Tethers turned into a giant Ponzi scheme). Then work through the business plan outlined in the blog post. Tethers issues the 100 million coins, which people buy with BTC. Tethers is now holding $100 million worth of BTC, which they can sell for real money. They do so, and now they are sitting on another $100 million in cash, so they can issue another 100 million Tethers. This is actually a frighteningly simple way to make money.
So how does Tethers actually profit? They profit when BTC rises in value. Going back to the $100 million example. On Monday, Tethers issues 100 million coins and they are promptly bought by people with BTC. Tethers holds until Friday. Then they sell their BTC, which has risen by 10%.
I have yet to see compelling analysis that Tethers is the cause behind BTC's rise, or that Tethers, by itself, is creating instability in the crypto market as a whole. One could argue that every shitcoin is equally contributing to the artificial rise in BTC, because all shitcoins are bought and sold with BTC (or ETH, which has seen a similar rise), and most shitcoins are entirely valueless themselves. |
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Date: January 19th, 2018 11:50 PM Author: Razzle-dazzle bat-shit-crazy forum coffee pot CR (http://www.autoadmit.com/thread.php?thread_id=3864801&forum_id=7#35194121) |
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Date: January 20th, 2018 12:08 AM Author: cracking amethyst hominid it’s effectively leverage and propping up the market if they aren’t selling the BTC immediately for cash though. bittrex could just be using USDT as a way to hold users’ USD in trust, e.g. if bittrex immediately sells the BTC received in exchange for USDT for USD. then USDT really is just another way for users to turn their crypto into cash without having to withdraw from crypto-only exchanges.
but if bittrex is holding onto the BTC to profit then a) it’s leverage because they’re effectively taking out loans on users’ cash to invest in BTC, violating the 1:1 agreement, and more importantly b) they’re stepping in as buyers of BTC where there would have been no buyer if users instead just cashed out their BTC for USD itself. again in principle this wouldn’t really be an issue if bittrex didn’t make the 1:1 guarantee and gave themselves the right to use leverage, but if they’re levering up they’re violating that and that could threaten the market’s trust. and of course the leverage makes the whole system more vulnerable to a drop in the value of BTC. |