Tether

[m22au]

https://coinmarketcap.com/currencies/tether/

https://seekingalpha.com/article/4129543-bitcoin-one-way-go-true

Interesting article about how Tether could be the reason for Bitcoin's most recent surge.

I'm finding it hard to find a reason for Tether's existence if it is solely used to buy Bitcoin and other cryptocurrencies.
It seems that Tether enthusiasts may be of the belief that if they sell a cryptocurrency in exchange for Tether, then it is not a taxable event.

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[Cuddles]

Nah, tether is mostly a place to park money in case of volatility or uncertainty. While true that is fungible and treated as an asset (hence allowed to use the 1031 swap exemption), in reality most people swap with better value coins in those events. If shit his the fan, I doubt tether would save anyone from the mass liquidity needed in such sell off.

 

[m22au]

Nah, tether is mostly a place to park money in case of volatility or uncertainty. While true that is fungible and treated as an asset (hence allowed to use the 1031 swap exemption), in reality most people swap with better value coins in those events. If shit his the fan, I doubt tether would save anyone from the mass liquidity needed in such sell off.

I understand the "a place to park money in case of volatility or uncertainty", but why not do that in US Dollars (or an investor's local currency)? Why the need for an extra layer of complexity and presumably extra transaction costs?

The only motive I can see is to legitimize tax evasion in the eyes of the investor.

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[Cuddles]

I understand the "a place to park money in case of volatility or uncertainty", but why not do that in US Dollars (or an investor's local currency)? Why the need for an extra layer of complexity and presumably extra transaction costs?

The only motive I can see is to legitimize tax evasion in the eyes of the investor.

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Not tax evasion if the IRS refuses to call it a currency but rather an asset. Not the crypto trader's fault the loophole exists. Tax avoidance is a more appropriate term.

 

[just21]

I think that on some less regulated exchanges they do not have USD markets so use USDT tether instead.

 

[m22au]

"There’s an $814 Million Mystery Near the Heart of the Biggest Bitcoin Exchange"
https://www.bloomberg.com/news/arti...her-and-its-links-to-biggest-bitcoin-exchange

"Sell Cryptocurrencies" thread by Ghost of Cutten:
https://www.elitetrader.com/et/threads/sell-most-or-all-of-your-cryptocurrencies-now.315717/

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[Vertex]

From the article on Bloomberg..*edit: i meant to quote m22au's link

However, Ronn Torossian, a spokesman for Bitfinex and Tether, refused to identify their current banks unless a reporter signed a non-disclosure agreement, an offer that wasn’t accepted.

What the hell!?!?! They claim to have 1to1 usd but wont even reveal the banks where this money is supposed to be? LOL

Can you imagine dumping money into a brokerage account where they just assure you that it is held in a segregated account...but wont tell you where and in which bank? Even with the regulations and oversight of US brokerages there are thugs like Corzine that manage to explode accounts.

This shit is a ticking bomb, its just a matter of time. Crazy money being made, but the tears are going to drown that out before this is over.

 

[Covertibility]

Omg the tears

 

[Daal]

I dont think they are issuing tether to prop up bitcoin. Bitcoin is very liquid, it has over $100B in market cap and it trades over $5B in a day. A few hundred million worth of tether are peanuts. I also dont think they are doing wash trades to prop up tether, humans see patterns where none exists as shown by studies. Bitfinexed (that guy with all the conspiracies) probably doesnt even have the tape reading experience to be able to tell, and its not easy to do it anyway

That said, I do think tether is quite sketchy for investors. The upside of a tether holder is 0% (in USD terms), the downside is 100%. The reason that this exists and people hold it instead of USDs is because some exchanges rather rely on it instead of fiat, they do it, I THINK, because they dont have the banking relationships to have USD fiat deposits and withdraws. It also helps in terms of moving money around between exchanges, with tether it can be done in like 30 minutes instead of the slow and expensive wire system. One could do it with BTC or even better, LTC but there is a fair amount of price risk there so there is some value for Tether
The problem is that this thing is an almost $1B pseudo USD currency that the US government doesn't control, the US government will not like that. I'm sure this can be used for many illicit activities. If they go after the bank accounts of anyone involved with tether, this thing might drop like a rock. So one has to be very careful if holding for long-term

I want to like this thing, it offers something really cool, instant USD electronic transfers at a cheap cost, but I don't think Big Brother will let this thing live for very long

 

[m22au]

The problem is that this thing is an almost $1B pseudo USD currency that the US government doesn't control, the US government will not like that. I'm sure this can be used for many illicit activities. If they go after the bank accounts of anyone involved with tether, this thing might drop like a rock. So one has to be very careful if holding for long-term

I want to like this thing, it offers something really cool, instant USD electronic transfers at a cheap cost, but I don't think Big Brother will let this thing live for very long

Yes I think this is an important angle - although technically a cryptocurrency or token, Tether is acting as a pseudo bank, presumably without a banking license.

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