The house of cards - Tether

i’m sure you’re all familiar with the fud by now, but please if you’re heavily invested in cryptocurrencies you should at least be aware that some very shady things are going on with Tether.

here are some resources:

in short, Tether provides a huge amount of liquidity to crypto-markets. The problem is that tether is not a cryptocurrency, it’s a token issued by a firm which is a sister-company to bitfinex, one of the largest exchanges in the world. Tether is supposedly backed by USD, but as all tether goes through bitfinex, tether refuses audits, and is unregulated, there is no way of verifying. ‘Bitfinexed’ has collected evidence that Bitfinex is engaged in wash-trading with minted tether not backed by usd to pump prices during dips. The amount of tether in circulation, combined with the liquidity it provides to an illiquid market, combined with its use to inflate prices, is enough crash the market for a very long time. in fact, it may be that the ridiculous over-valuations of utility tokens are a direct result of tether inflation. for those who say the mcap of tether is a ‘drop in the bucket’, mcap does not represent the amount of money put into a currency, or the amount which can be withdrawn. You can easily tank a 100m mcap coin with 1m, for example, less depending on the volume.

Also, the founders of bitfinex and tether have a shady history. Their handling of tether-related issues in the past is on par with typical scams that have no regard for consumers.

My opinion is that the impact of this will be far worse than Mtgox. The loss of trust in decentralized platforms and cryptoeconomics will do irreparable damage to crypto and token prices may take years to recover.

As always, dyor. check, let me know what you think.

1 Like

Soooo don’t be retarded? If something is backed by cash it doesn’t mean it is cash it can fluctuate in value based on the amount of demand like during panic sales the last few days with coinmarketcap delisting Korean exchanges then the bitconnect (and possibly COSS) ponzi schemes. If you want cash buy cash otherwise I use Ethereum for all my liquid between fiat and exchanges now.

it doesn’t matter if you hold tether. if $2 billion counterfeit if being used to prop up the market on demand, the whole thing has been a house of cards since they started printing 100s of millions at a time last year. it doesn’t take much $$ to influence a large market cap, it doesn’t take much prop up the whole market. if they stop doing this, prices won’t stop falling and everyone will panic.