The world's most used crypto, Tether explained

[Pekelo]

Tether is a mystery. I like mysteries. It can still go on for quite a while though. As a test, I would like to see the crypto economies run for 3-6 months without any Tether printing. If price stays up, then it wasn't because of Tether. After all, other stable coins exist, so they could take over Tether's role.

No, I don't expect BTC to completely collapse when Tether does. But I expect it to have a decent readjustment, shall we say back to the 15-20K range. I have a feeling whatever Tether is doing, eventually some other stable coin will be doing too, so removing it now is almost too late. The idea is out of the bag....

Tether does have a duck problem. It walks like a fraud, it sounds like a fraud. Chances of it being kosher is very low.

 

[AbbotAle]

OK, that's nice to know Pek, you think Tether is a fraud (fair enough) but you're not stupid, ie thinking tether doom will lead to long lasting BTC doom.

Let's see what happens, the next 6 months are going to be very interesting re tether because the debate isn't going away. Both sides make good points and both are confident in their views.

Who is going to have the last laugh...

 

[RedDuke]

The only way to know BTC real worth is to allow it to be traded in fiat only. Just like any other product on the face of our planet.

stable coins that are audited by reputable firms are fine as well of course.

I expect BTC to be below 10K once Tether explodes.

 

[Pekelo]

The original business idea behind Tether made sense. There was a need for stability in crypto space and Tether provided it. They sold it for a buck and maintaining the peg, could buy it back for 99-98 cents. 1-2% profit right away. And then they burn the coin and issue a new one as needed.

Oh yeah, at one point, they realized they don't actually have to burn the coins. From that point on they have been practicing fractional reserve banking (what crypto fans originally cry about) or just committing outright fraud, when make up coins although there is no natural need for them. Those unbacked coins can be used to manipulate the market price on exchanges. The system works until it doesn't. Let's throw in money laundering, because why not and we have a fragile ecosystem that can be brought down by multiple causes, but for the time being, it is not in any participant's best interest, so the wheels I mean the printing machine keeps printing.

There are several questions unanswered, and who knows if we will ever get the answer? One interesting ponderable is, that if an unbacked Tether is removed but other backed stable coins take over, would the whole system change at all?

 

[Sprout]

Cool, nice write-up.

Is there anything that would refute your thesis?

btw, do you have skin in the game with a sizable short position?

 

[Pekelo]

Cool, nice write-up.

Is there anything that would refute your thesis?

btw, do you have skin in the game with a sizable short position?

And independent audit of Tether showing I dunno, like 80% backing, or at least the previous 74%.

I am thinking of shorting MSTR...

 

[johnarb]

And independent audit of Tether showing I dunno, like 80% backing, or at least the previous 74%.

I am thinking of shorting MSTR...

Please be careful shorting MSTR. Pekelo. It's coming out with earnings, soon. You can still short it, but at least be aware of any upcoming news, maybe better to use puts, instead

It's also hosting the biggest anticipated bitcoin conference in the first week of Feb/2021.

https://cryptoslate.com/microstrate...housands-of-executives-interested-in-bitcoin/

 

[johnarb]

Please be careful shorting MSTR. Pekelo. It's coming out with earnings, soon. You can still short it, but at least be aware of any upcoming news, maybe better to use puts, instead

It's also hosting the biggest anticipated bitcoin conference in the first week of Feb/2021.

https://cryptoslate.com/microstrate...housands-of-executives-interested-in-bitcoin/

Sorry, better source and more details on the bitcoin conference in the first week of Feb, 2021

https://www.forbes.com/sites/billyb...ould-be-very-big-for-bitcoin/?sh=54bfae187c8e

 

[AbbotAle]

And independent audit of Tether showing I dunno, like 80% backing, or at least the previous 74%.

I am thinking of shorting MSTR...

With Bitcoin/Tether bears there's always a lot of talk, but never seems to be much action in backing up that talk

 

[Pekelo]

With Bitcoin/Tether bears there's always a lot of talk, but never seems to be much action in backing up that talk

Not an argument. PM me when you have one.

Are you still into crypto? Haven't you heard of GME? That is the new store of value!