This is exactly what is in question. Has there been 1 USD paid for each Tether out there.
Why do you think US went off the gold standard? They wanted to create more dollars without having to have to mine more gold. When you don't back up your currency with anything and can print as much as you want, you're just basically hoping people don't figure this out.
This makes no sense. There is no blockchain with Tether. Its the exchange that just lets you trade your BTC for USDT and vice versa. If all of a sudden people started to worry about the validity of Tether, everyone would want to get out of Tether. I imagine the exchange will be stuck with lots of USDT and nobody to sell to. Then they will want to go to the Tether issuer and perhaps gets some USD, but clearly if there is an issue, the USD won't be there. Perhaps the exchange will be the first person to know, and they won't allow any transactions in USDT, so anyone who has it now has useless digits. Heck, it will even make BTC spike in price because people would rush to unload all stablecoins at once.
Here is an example with real estate. Suppose the current value for a house your size in your area is 1 million. Some house down the street sells for 1.1 million simple because a drug dealer needs wants to clean some money. Then some offshore investor buys the next house for 1.3 because it has had multiple bids and they have lots of access to cash and want to park some money in a foreign country and were happy paying 200k over asking. Now all of a sudden, houses have gone up 30%. All the next listings will be at 1.3 million and higher. And this will be based on 2 transactions! Perhaps 50 to 100 houses in your immediate are now worth 30% more!!!
It doesn't take much volume to move the price of BTC 1k. For ES as an example, the price can move quite far overnight on low volume. But with crypto, it can move 10% in an hour with I think only several thousand coins. (although I'm not an expert on volume and there are so many exchanges so you can't really compare like you can with the CME) The point is, if with 50 million, you can move the price of BTC just 1%, and people adjust to this new price, then printing tethers out of thin air might have moved the price even 50%.
Yes, when Elon tweeted that TSLA was buying BTC, I'm sure there was lots of new money entering. But what if its not new money, but rather 50 million in Tether that didn't have USD behind it.
One more example. In poker, you can easily make a person with a good hand believe you have an amazing hand if you just keep raising your bet. They will eventually fold, too scared to put up any more money. But what if you knew they were bluffing? Tether might be the bluff. The government regulates how much money banks need to have on hand in their reserves. Nobody regulates what Tether has, and they refuse to provide details. There is something fishy going on. How much this has affected the price of BTC I don't know, but I think its possible that just like RE values being bid up crazy amounts with offshore money in certain cities, its possible that BTC price has moved easily 50%. The FED is doing the same thing. When they go in and start buying bonds, isn't that supporting the price of bonds? What would those bonds be worth if the FED wasn't buying?
