Can you imagine a colon coin
This article is also an interesting deep dive on Tether in particular, who seem really suspect. Banned by the New York State AG, repeatedly avoiding audits, with laughable claims of commercial paper backing and almost no cash backing for their stablecoin, it seems very difficult to believe that they’re telling the truth about their reserves or transactions/relationships with others in the ecosystem. Interesting also to read about the associated exchanges which seem to be very close to Tether as well - Binance, Bitfinex, HitBTC etc. which nominally are the largest crypto exchanges in the world and account for most of the market cap people throw around, but seem to almost exclusively have Tether flowing in to them and out to other coins, not fiat
I wonder what will happen when they stop printing billions of tether a week?
How can this possibly be backed in any meaningful way? How is this not a fraud? They have been ‘minting’ billions of USD in value every month for months. There isn’t enough commercial paper/cash to cover this in any bank they do business with.
The upshot: over two-thirds of all Bitcoin — $10 billion worth of it — that was bought in the previous 24 hours, was being purchased with Tethers.
I think at this stage all crypto traders know that Tether is really a fraud but it has become “too big to fail” so the risk is brushed aside.
Without Tether leverage would be wiped out of the crypto markets. Just in Binance for example you can leverage up to 125x. Yes with just 100 USD you can place a buy trade of 12,500 USDT for Bitcoin.
And no exchange would risk they own cash by providing 125x leverage; they’d go bankrupt very quickly given how volatile cryptocurrencies are.
But using Tether (and being in bed with Tether) it does not matter if they loose since they don’t need to fund it back with real fiat. In fact it is even lucrative to the exchanges since they can wipe out that initial 100 USD that you deposited if your leveraged trade goes against you and you get liquidated.
Tether balance sheet is so large now that it has become a systematic risk and it is bringing attention to the financial media and the regulators.
Even CNBC with all that sponsorship money they get from Greyscale (Bitcoin Trust) were talking about this systematic risk on Mad Money:
The end for Tether is near, it will implode sooner or later.
I’ve been saying this for years. Eventually bitcoin WILL be hacked. It’s not a matter of if, but when.
Hence the reason I’m not all in on crypto. 5% of my portfolio is high enough for me.
Very true, anything that relies on tech as a security will need to reinvent itself or find a new security and that won’t change.
There are already quantum proof hash algorithms - if quantum computing was near, the protocol would be forked
First they ban and then label as an asset.
Here we go again