Well, I first thought Tether was a scam,
Then I started digging deeper and deep diving into the intricacies, the whole Due Diligence portion.
And then I came to the conclusion that there are two sides to a story here,
And that Tether is still a scam.
I did, however, made a bull case on how Tether could Redeem itself at the very bottom. So you can scroll through all this trash talk if you want some positive fluff. Just go to the “A Path for redemption for Tether” Section before the closing statement.
So with the title, only the first portion is accurate, AND it does threaten the entire banking system by being a huge unmitigated fiduciary risk by (and to) interconnected crypto markets.
The inception of Tether
A white paper was published, which detail a whole bunch of words saying why Tether is good and the problems it can run into;
It has some pretty interesting things like so;
Here’s their infographic that explains how Tether should work;
Also, through researching a bunch, I’ve edited their infographic (based on -and taken from their white paper) to reflect what the public consensus on how their business model works;
Tether was originally called ‘Realcoin’ and launched in 2014 with some notable people that know things about stuff and things;
They got Buddy Buddy with Bitfinex, a Crypto exchange. Or atleast, that’s what it looks like. So let’s dive into this Bitfinex relationship;
So Bitfinex and Tether happened to share the same shareholders, managements, bank, and even had some interviews where people ‘slip of the tongue’ and forgot which company they were representing. Literally on youtube, here’s a link.
So Bitfinex’s CFO (Giancarlo Devasini) and Chief Strategy Officer (Phil Potter) and CEO (Ludovicus Jan Van Der Velde) own basically both Tether and Bitfinex in some weird game of musical chairs.
A look at some random posts from 2012 reveal that there are some old forum posts that connect a forum account to a “Raphael Nicolle” who talks about making ‘arbitrage’ of bitcoin, and then later talks about the inception of Bitfinex.
A Bunch of shady backgrounds with low tempered paper hands jumped on a flagship called ‘Bitfinex’ that would change the Bitcoin world, and it will keep on doing so. They made a lot of money, but so did every other person who bought a shit ton of bitcoin when it was 99 cents. So, they were early, but I wouldn’t equate luck with [insert compliment].
So Ralphie my boy, what did you do?
So Tether and Bitfinex is very connected; then the question is, where is the most Tether? Turns out, it trades a lot on Bitfinex;
Oh, also they (The royal ‘they’, lmao) got robbed in 2017,
While Tether is also, possibly being pumped by Bitfinex itself,
And Bitfinex and Tether are partners in crime, literally. They got scammed and instead of telling the truth, they lied. Which is a crime, probably. Idk, I can’t practice law, but that seems like a fiduciary negligent action that has monetary losses which would probably hold up in a civil court somewhere. Or something,
Just to reiterate, they lost $850 million dollars in 2019, which happens. But then they Sugar coatingly lied about it, which is not okay and not acceptable.
So NYAG slapped them for a fine around $18 million dollars.
Fast Forward to now-ish (June 2021)
So, This shit coin call Tether Exists,
It’s supposed to be a ‘stable coin’ that is backed by equal amounts (pegged) of US Dollars.
Well, atleast, it certainly was ‘supposed to be’ except it’s not US dollars. It’s mostly backed by ‘commercial papers’ with value assessed by some back door wizard to be equivalent with US Dollars. What I mean is, USDT is full of shit and isn’t transparent.
And they got investigated by New York Attorney General around February 23rd, 2021 to figure out what the fuck they do in the back door of things;
In fact, they (Tether) aren’t backed 1-to-1 on USD, even they say they aren’t as of March 31, 2021 in their self-proclaimed ‘unrival transparency‘ which is actually just this shitty one page pie graph and no certifications by ANY auditing team;
So only about <3% of all the USDT is backed by actual treasury bills or the US Dollar. So, if someone were to ‘redeem’ 5% of the market cap, then uh, well, Tether would face major liquidity issues. Because, they don’t have the funds.
I think the other important part is that 65.39% of their 75.85% cash ‘equivalents’ is commercial papers that Tether refuses to be transparent about. So what are we dealing with? Some art that a preschooler made and slapped a 50 Billion dollar price tag on it? or What?
(65.39% of 75.85% is 49.6-ish percent of all USDT -that’s-like-half- is backed by these Fugazzi Papers that they refuse to reveal)
And all of this info came out after Legal action by New York in order to protect New York’s
money cows citizens from scams.
It’s not clear what these Commercial papers are, nor how they are valued. I mean if they’re just a bunch of IOU’s backed by Bitcoin, and if bitcoin were to tank, then this entire shit coin would fuck up the entire Crypto market. Hypothetically speaking.
And all of these reports are after the NYAG dug deep into Tether’s Ass in February,
After that, Tether had an auditing team (Moore Cayman) verify their reserves in Late March 2021.
Here is a link to their March Report if you want to read it. If they deleted that link, well here’s a saved pdf (just in case. I’m having to save things on the website because some jerkwads keep copy striking or removing good memes).
So the sentiment out of the Moore Cayman report is a bit different, but I could understand that the legalities with some auditing firm in the Caribbean probably have different standards for their legal jargon and fiduciary requirements, possibly.
Also, the Moore Cayman audit report considers Tether to have enough “Consolidated Total assets” to offset their liabilities. Which doesn’t necessarily translate to petty cash or fiat money.
The wording here is very key, it really sounds like they can ‘LIQUIDATE THEIR ENTIRE COMPANY’ and then would they be able to redeem the digital asset tokens issued. Imagine going to a bank and trying to withdraw money and the clerk goes ‘hold up, let me sell our office chair to get you your money’. Like What The Fuck.
And of course, that’s if I’m reading it correctly.
Before the Moore’s Cayman report, they had several other entities ‘audit’ their reserves. All of which concluded with a ‘I think you’re good for it, but This wasn’t a real audit just in case someone wants to do a real audit and sue us’;
On a side note, people are quick to question the legitimacy of
offshore Caribbean financial teams; Especially since Panama papers was a thing. But this is simply me, straw manning, because I’m petty.
Also to go along with auditing and truth, Tether boast it’s transparency but has opaque banking and backdoor handling of their accounts since the beginning. It’s like pulling teeth transparent. And in the recent (June 2021) ongoing XRP/Ripple case, Tether denied a discovery request of some sensitive information that would help regulate/defend/lawyer-something XRP/Ripple. It’s like they are hiding something or something. . .
Well, here’s a link to a really good Tether Audit if you want to read a lot of text.
In fact, this paragraph is pure speculation, but what if Tether was pulling a good old Enron on us and using SPE and SPV to fudge their numbers. (using throw-a-way companies to take out loans and debts to inflate assets. It’s like having children and borrowing from their life insurance policies to make your bank account bigger. You know, like a good parent). Maybe that’s why no one want’s to be officially liable for doing a real official audit? Maybe the SPE and SPV is actually Bitfinex itself, and it’s shoveling money into Tether to lock away (and burn) it’s userbase’s (‘outsiders’) money. Of course, this part is speculation though.
So, just for the record, Tether had 35 Billion in Februaryish, went up to 41 billion in March, and is as of May 29th, around 67 Billion dollars. So in two years, since the inception of this shit coin, the market cap/value has gone up to $67 Billion dollars with a questionable reserve and philology.
This audit apparently gave enough faith in Tether’s own ego stroking that they decided to tweet that they were not ‘losing its peg’ even though the NYAG said they were fucking liars (to be fair, they said they lied. Not that they were actually ‘fucking liars’) and that they even admitted themselves to not have the cash reserves;
Now we segue into redemption
Per their website, you can redeem USDT for fiat.
However, that quote above stating their policies says;
“Tether Reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves.”-Source
Which means that Tether might slow the exchange of Tether coins to Dollars if they don’t have enough US Dollars. Which we know for a fact that they literally admitted, investigated, and was slapped with a fine for not having enough US Dollars.
AAAAAANND, Tether Reserves the right to make more of their shit coins by using not US Dollars (‘in-kind redemptions of securities and OTHER ASSETS held in the Reserves’), like crypto, or some other shit coin.
People are salty on twitter;
Do people redeem Tether to fiat? The answer is no one fucking knows.
And you’d be hard pressed to find people actually saying they’ve redeemed their Tether.
I made a Google Search for you;
So, until someone gives proof that redeeming tether for fiat is viable, I’m going to go and say it’s not.
So Why don’t people redeem?
Simply because fees,
Here is a post detailing the Fees that were charged for Tether Redemption in 2019;
This was recently taken from their website and it shows you how expensive it is to work with tether directly;
So you need a minimum of 100k to ‘redeem’ Tether and pay fees on top of that, and exchanges won’t let you redeem. So most people just swap their Tether for some other shit coin and pay out on those exchanges instead.
What all of this means is, that USDT isn’t meant to be redeemed by the poors. It was meant to be redeemed by Exchanges that want to bypass bank regulations like (Know Your Customer) and such.
Thus, these fees exist to collect from exchanges as a sort of ‘cost of doing business’ and basically ‘laundering money’.
However, even the exchanges aren’t redeeming Tether. Because the supply of Tether tends to go up in most every situation (with exception of the recent chain swap of 3 billion or whatever).
Oh, and if you tried to withdraw in 2017, well, there were liquidity issues. They couldn’t give you your precious fiat;
The fact that the coin has lost its peg, isn’t backed by equal amounts of US dollars, means that they have liquidity issues. It probably didn’t help that they lost millions of dollars and coins throughout 2017 to 2019 through hacks and ransoms. Soo, they definitely didn’t have the Fiat to back redemptions.
Which, I mean, they didn’t allow redemptions.
Because Liquidity issues.
It’s almost as if the coin itself is never meant to be redeemed and only exchanged and held as a store of value. Even though Tether themselves explicitly states that the Coin IS NOT A STORE OF VALUE. (I Forgot where they said it, but you’ll have to just take my word for it).
Tether is ironically supposed to be pegged to a depreciating asset called the US Dollar which loses value due to inflation and other bullshit market mechanics.
Which was part of the reason crypto currency was made, to be decentralized appreciating Limited equity asset that was not tied to fiat.
So Tether decides to be a crypto currency that ties crypto to fiat.
Like, they didn’t think this one through. . . lmao, it’s a clown world.
I took a screenshot of the editorial (during its rough draft) so you can slowly understand how fucking retarded this sounds;
So no one redeems Tether, and instead they exchange it to some other coin like Bitcoin or Ethereum or some shit coin and then they redeem that instead.
So someone buys USDT/Tether, transfer it on an exchange, and sells it and cashes out.
And then there’s arbitrage and swaps. But that’s going to get fucky later on (in the article).
So What does this mean?
It means that the supply of Tether only goes up due to no one wanting to deal with the cost of redemption and exchange from their shit coin to Fiat money.
The supply and pool of Tether goes up and acts as an ecosystem/pool for stability and storage. . .
You know, Like a Bank.
But not regulated.
Without proper (usury) interest rates that keep normal
zombie banks alive.
But what does this all really mean?
Well, it means Counterfeiting US fucking Dollars baby;
Alright, so you got this fungible token that is equivalent to the US Dollar, and you may or maynot have the backing to prove the reserve requirements of these coins.
So, if you were to print these coins in thin air, then you would essentially be printing US Dollar equivalents.
Thereby artificially inflating and providing a form of quantitative easing to the wider crypto community and decentralized finance. While also printing money like a federal reserve, or central bank. You know, like counterfeiting.
Uh, Fed bois (Fed reserve, not FBI, but also FBI if you guys care), are you listening to this? They literally-ish are an unregulated bank with a money printer going BRRRRRR.
Here’s a snippet of a twitter thread that says basically the same thing;
So they’re a bank but not a bank?
Uh, kind of, it’s awkward. Like when A man walks into the wrong bathroom, kind of awkward.
You see, Banks and Bankie’s have this cool weapon called Fractional Reserve Banking, where they only need to hold 10% or so in reserves and they can fractionally, fractally, loan out the rest like phantom shares in a naked short selling Ponzi scheme.
And Tether apparently is dubious enough to word themselves to grant themselves the same weapon and power,
You know, because they don’t require strictly cash reserves, but allowed to have ‘commercial papers’ or whatever to back them up,
So, Tether isn’t regulated, so it doesn’t have to answer to the economics of a higher bank.
But also, Tether is self-proclaimed as regulated. You know, like how I self-proclaim I’m a millionaire, but I’m not. It’s delusional stuff really. Off to the looney bin I go.
Tether is like an unregulated shadow bank, but it doesn’t have the reserves to back up it’s actual liabilities.
In other words, this is worse than fiat currency and somehow people are using it to hold value for exchanges giving it intrinsic value equivalent to fiat without having to actually be redeemable or backed by anything.
In other words, this shit stable coin is actual a new form of fiat crypto currency, or simply;
The worst of both worlds.
Congratulations Defi, The community has created a monster that will entropically decay away at the markets, both crypto and fiat until there’s nothing left but shit coins. Like that postage stamp machine, but worse.
As a side note, if you work outside the laws and regulations, then technically everyone and everything out there are ‘outlaws’.
So this is what you get when you stray away from the order of an economic system, by introducing all these dangerous technologies. I mean, gold was dangerous enough, but now we got some fucking fancy digital bean coin that people will literally kill each other over and hold/ransomware Oil pipelines and Medical Facilities at ransom. All for some bean coins.
Congratulations for progress, I guess.
Here’s a meme;
Break time. Go ahead and get yourself a soda, take a piss, walk the dog, put a leash around your neck and walk yourself, maybe hang around the living room, idk, do something.
*elevator music plays*
Alright, back to our regular programming, so let’s recap;
They have a shady history and are in cahoots with Bitfinex.
Tether is not true to being backed by a dollar per coin.
No one redeems Tether.
Yet they still face liquidity issues. (even with no one redeeming it).
And they arguably are creating counterfeit USD equivalents to fluff up the Crypto market.
But even with the liquidity issues, they make the Tether Printer go BRRRRR.
Tether, the ultimate Arbitrage and some transfer fees
Here’s a great article on how Arbitrage in Tether world works, I’m going to butcher it for you and tell you dumb down speak and then go into the fees.
You basically buy tether on an exchange if it’s less than a dollar, and sell it on another exchange if it’s greater than a dollar. Rinse and repeat.
The problem is that there are fees, lots of them. Transfer fees average around 20 buckaroos, so if you’re not moving an shit ton of shit coin, then you’re doing yourself a disservice.
What ends up happening is, people create bots that arbitrage thousands to millions of coins at a time. All to take advantage of high demand and excess supply of this shit coin.
Then the bots arbitrage too much or too well that it’s actually poorly, and end up creating a gap or mismatch, which other bots sweep in to correct.
So some botters lose money, some gain. That’s how markets work. For someone to lose money, someone’s gotta gain it and vice versa. So what you have is a bunch of bots circle jerking each other to match 1 US Dollar.
And the exchanges play ball because they get to collect on transactions, they get their ‘gas fee’.
I mean, if you look at it in another light. These bots add liquidity through redistribution on these exchanges while also limiting maximum volatility through scalping and adding minimum volatility by essentially playing themselves.
ANNDDD to top it all off, these bots aren’t just trading Tether. They’re exchanging Tether for other coins. Well, because you definitely can’t exchange it for cash.
Why is it important that I mention other coins?
Because other coins are also being botted out by robot algos to have price mismatch, scalping, and arbitrage. You know, like when someone creates a robot to trade Doge Coin based on Lord Elon Musk’s Tweets.
Here’s a picture that is simple terms with two exchanges. This can daisy chain to include ALL exchanges that offer USDT. (So you could have like 5 different exchanges with a bot trading back and forth between all of them.)
So a cool thing about Tether is, they can easily settle and clear USDT because it’s backing ‘itself’ on the block chain ledger or whatever shit protocol, allowing the mass transfer and immediate use of USDT to exchange for other coins like ETH or BTC.
In old fiat ways, you had to clear and wait for cash to settle before you could use it. Now that USDT settles and clears itself, it becomes a stepping stone for buying and selling ETH or BTC a lot faster.
What I’m saying is, shit is less regulated. Here’s a tweet that confirms my bias;
Although some arbitrage methods still use fiat money, which Is a problem. Because what ends up happening is people keep buying Tether with coins or fiat money, but no one is turning Tether into Fiat money.
So TETHER is eating up liquidity (because no one is redeeming) and the bots are only accelerating that (for a quick buck of course). (This is a very important line to remember, but I’ll remind you at the end. This IS A BIG DEAL)
These arbitrage opportunities are presented to non bot users (and some dumb people) as ‘swaps’ or ‘pairs’, they look something like this;
Swaps can be presented between many types of coins. You might even ‘stake’ your coin in a swap for someone to arbitrage it on several exchanges. Of course, it comes with risks but I’m not here to explain all the mechanics on how to lose your money. That’s only reserved for Tuesdays. (and if you ask where the advice is, I ran into liquidity issues so no advice anyway. Ha, jokes)
Tether and Bitcoin, a match made in hell
Tether’s market cap is supposedly;
To put in perspective, Bitcoin’s market cap is;
So about a tenth of bitcoin is the market cap of USDT,
And of course people, know that Tether is artificially pomping, pumping, and inflating the Crypto market.
Technically could be viewed as market manipulation, fraud, and Counterfeiting. . . So. . .
Tether makes about 2/3rd’s of All of Bitcoin’s transactions.
During the NYAG assessment/investigation of both Tether and Bitfinex, some fucky things happened in the market;
So, this data hints that Tether and the bots and Bitfinex are all intermingling in a shitty connection of dominating and manipulating Bitcoin.
Tether is interconnecting the fuck out of the markets
Tether is used on many coins, here is data from January 2021;
Which means that the exchanges have to play ball,
So these Exchanges get into crypto for one simple reason; money.
They want to collect gas fees and they’re either evil enough to understand Tether and manipulate Tether, or they’re retardedly greedy enough to list all the shit coins in hopes to collect more money.
You see, Tether may have a market cap of about $60 billion dollars, but it trades a volume of about 3 to 5 times their market cap. This means that the velocity of money for each USDT is 3 to 5 transactions a day per USDT. Which is a fucking lot.
Here’s a side post and take note that exchanges are complicit in their willingness to Trade Tether;
The volume of $140+ billion is an absurd amount, meaning that it’s either a very effective currency, or a shitty one. Depends on how you cut it.
And if Tether faces liquidity issues, then it ties all the exchanges that it trades with down with Tether. It’s like tying two ships in a storm, except it’s the whole harbor (all exchanges), and it’s out at sea (not in port).
Here’s a thread;
And because exchanges can’t redeem, they just hold a bunch of shit coin. Hey Tether, if you’re reading this, you should allow Exchanges to exchange Tether for USD at a not usury rate or exorbitant fees. That would at least help sustain the crypto ecosystem. . . Unless you don’t have the liquidity.
So these exchanges are bagholding an intermediary shit coin, resulting in a very soon, very large, shit show of collapse.
Because that would imply that MANY (if not all) exchanges are ‘insolvent’ and have more liabilities than assets to back up the ‘offramps’ of users cashing out their shit coins.
Here is Independent Reserve (an Aussie Exchange) CEO in 2019 saying a similar tune;
So, you remember how I said that Tether was a money printer artificially inflating the crypto markets thereby increasing inflation but not having the liquidity or reserves to back of the demand?
Well, turns out, that means you have a giant crypto bubble. And it’s being POMPED by Tether. Resulting in crypto exchanges everywhere nervously sweating because the liquidity issues became spread through the markets.
So now everyone gets fucked. It’s a great love story.
I realize this might sound convuluted, so let me slow down a bit.
Crypto exchanges hold crypto currencies as assets on your behalf or trade on your behalf, and they get money off of interest of exchange fees.
However sometimes there is not enough money to exchange the value of inflated crypto currency assets because their not paired properly to USD.
Which may result in some issues like so;
Let’s go over some hypothetical scenarios to help clear what I butchered earlier;
You start a Shit Exchange called SHITXE Platinum, and you start up with something of like idk $50 million dollars in fiat after several series and rounds of funding.
You collect a modest amount of fees from transactions both on and off the exchange (internal and external), everyone really likes Butt Coin for some reason. And Butt coins trade at 20k.
The World’s Second richest or Third (first?) guy decides to make memes and tweets to move his Innovative Company into purchasing Butt Coins.
The price of buttcoin went up by a modest 200% to a 300% valuation. to like 60k.
The value of Buttcoin on your exchange went up 3x, and now a whole bunch of people want to cash out.
Not only that but you have a swarm of people coming in from other places, opening accounts, transferring coins to your SHITXE Platinum and they want to cash out.
Let’s hypothetically say that the swarm of new people and the people you had are now cashing out at a rate higher than people throwing money into Butt coin or your exchange. You know, like a Bank run.
Now you don’t have enough fiat to support withdrawals of Butt coin. You’re now fucked.
But wait, there’s more. Let’s say that Butt Coin decides to tank and a whole bunch of people are burned, and they have stop losses or some other paperhandedry happens. And now they want to take their gains/losses to go at an even HIGHER DEMAND.
Well, in this case (too) you’re still fucked.
Simply put, low reserves and sell pressures will fuck up your day;
And this Scenario 1 had nothing to do specifically with Tether. So keep that in mind.
Tether keeps on making USDT, but rarely ever does it get ‘burned’ or ‘destroyed’. Which it would destroy if it had too much excess USDT in reserves… (in theory)
So if you were to redeem Tether for fiat, Tether would store your ‘turned in’/redeemed’ USDT in a reserve account to remove it from circulation. Technically, based on their proclaimed ethos, they should also Destroy the USDT, since it’s no longer backed by the money you withdrew.
In this Scenario, they probably don’t remove from circulation, and there’s a good chance that they don’t destroy tether in most cases. And Assuming no one redeems tether, what ends up happening is that;
Tether keeps on getting bigger.
If people are depositing actual fiat for Tether, then that means Tether is eating liquidity. At the exchanges, let’s say random newbie investor throws $200 into Tether because they don’t know anything about it and were speculating it to go up to $20 a coin. Yes, this is how some traders operate. No research, they just go in.
Then this trader realizes that Tether coin stays at $1 pretty steadily. Upon notice, this trader realizes that tether won’t go up in value, so they try to redeem for other coins or cash. Trader redeems can’t redeem from the exchange directly.
So Trader trades Tether for some other shit coin and then redeems that shit coin for cash,
but no cash is redeemed from Tether.
No one redeems Tether, no USDT is destroyed;
So Tether just keeps on growing.
Tether is Eating liquidity of fiat, slightly threatening the US Dollar, and growing.
But more so, Tether is eating the liquidity of the overall Crypto Market. Due to the ability for people to trade valuation of Crypto assets for like-kind amounts of Tether.
Therefore as Crypto prices go up, (due to arbitrage) more tether is minted, and more of the market is in Tether.
As Crypto prices go down, Tether amounts stay the same (because no one redeems and if they do redeem, no Tether is destroyed), therefore proportionally there is more Tether than what was once before.
Here’s a quick ‘Unrivaled Transparency audit’ MS paint diagram with 5th Dimensional high level Hard-econometrics arrow proof to explain (brought to you by, yours-truly);
Tether eats liquidity which is only accelerated by transactions (and possible money laundering of exchanges to circumvent actual financial banking regulations).
As Tether eats liquidity, the ‘Critical point’ or the ‘price floor in which liquidity problems/issues are realized‘ keeps going up. And it keeps going up. And up. Did I mention UP? And as exchanges have these liquidity issues, their ‘critical point’ will keep rising proportionally to how much
shit coin Tether they have.
Eventually even the smallest dip will cause large liquidity issues.
Some have calculated the ‘Critical point’ to be about 18.5k and that number will only get larger proportionally to the amount of Tether in the overall markets. And to be clear, there are various different ‘Critical points’ for each exchange depending on their exposure to the liabilities of Tether (How much Tether they have. More Tether means a higher Critical point which means bad things).
And of course, having Bitcoin be below this ‘critical point’ isn’t an issue unless you’re trying to cash out.
As a side note, this inherently makes Bitcoin (and overall crypto) have intrinsically negative value (and exponentially more liability) when compared to fiat currencies. Congratufuckinglations.
What’s stopping Tether from hitting print?
That’s right, Nothing.
Tether Pumps Coins.
Which people treat as ‘US Dollar equivalents’ and use to buy Crypto at market price.
This increases buying pressure.
Stonks price goes up.
More print, more pump in Assets. Overall inflating the worth/value of crypto. . . But not the true value, because there’s not enough liquidity for everyone to cash out.
Thus the Price of Bitcoin and others have gone rogue and deviated from their ‘true’ valuation of being backed by demand quantified in fiat.
True decentralized finance, where even the price of these internet bean coins have gone rogue from Centralized Crypto exchanges. nice.
Glad there’s so much spoofing and Market Manipulation in the unregulated crypto markets. Glad that normies trade on centralized exchanges. So smart.
ALL three scenarios are potentially happening at the same time on multiple exchanges having a Regenerative feedback loop of exponentially degenerative outcomes for the entire Crypto market.
Let that sink in.
Ahem, Second and last Intermission. Take a break, or not.
Here’s a side side speculatory question
Could Tether be ‘faking’ their ‘Stolen wealth’ and ransoms to cover their liquidity issues?
This might explain that $850 million dollar ‘loss’ and a recent ransom issue;
Report to everyone that someone is stealing from you,
Let people know you ‘lost’ this much money
and then do nothing, because you never had the money anyway. (Because you lied, fake printed, or absconded with da real funds)
Like Naked Short Selling or Insurance Fraud but with little to no paper trail (because the paper didn’t exist).
Another theory is;
Due to the relationship of Bitfinex and Tether,
Bitfinex front runs and flows money into Tether. So Bitfinex is the Casino, Bookkeeper/cook booker, cash inflow, racket, and the everything else bad.
While Tether is the launderer and hidey hole storage of the vig.
In the event that Bitfinex runs into some issues and goes under (for whatever reason)
All the wealth was stolen and put into Tether. With the legalities that *might* protect the scammy owners. (idk, I can’t practice law).
Tether moves on to do the same with other exchanges, allbeit not as friendly as they had with Bitfinex. But whose to say that the shadow puppets that made bitfinex won’t ex their old company and prop up a new one and start their ponzi scheme from scratch?
Tether already is siphoning liquidity at an alarming rate. So this possibility is not far fetched.
Alright, Now let’s talk about the ‘good’ sides of Shit Coin Tether;
By not mentioning Tether, We can talk about the Federal Reserve. Notice that it’s called ‘The Federal RESERVE’ and NOT ‘The Federal BANK’. Well, apparently Money is a liability for banks because anyone can redeem that shit. So why be liquid when you can be ‘reserved’? Thus limiting your liabilities, so reserves.
Well, let’s go down memory lane;
I mention this because Tether does the same thing but in the span of less than a few years of it’s inception;
Tether essentially, like most stable coins, threaten Fiat currency by itself becoming Fiat Crypto.
Printing more money(Tether) inflates the (crypto) markets which will invite a (shitty) correction.
No one redeems Tether, thus it just grows like an encroaching shadow gorging itself on stupid exchanges gullible enough to list Tether.
And it grows not proportionally on who deposits money, but on whom ever controls the ‘print’ button.
So, on the bright side, you get a mini bull run on the market.
And you get to stick it to the fed bois.
on the down side;
you risk global collapse of the Crypto markets while also running the risk of never being able to cash out because of liquidity issues.
I think that’s a fair trade off.
Here is a link to a thread that is one perspective in support of Tether, but I personally see a shit ton of holes in the thought process. However, I thought I should share without my input, so you can hear what other’s have to say on a semi positive/optimistic tune.
So The TLDR format of important Take Aways;
Tether is not backed by a dollar, no one redeems Tether, and it has liquidity issues itself.
Tether is suspect along with Bitfinex for having a shady history, shady track record, ‘unrivaled opaque’ sheets, and is possibly attacking the US Dollar by printing USDT as money equivalents, which is a form of economic Terrorism that uses beguile and trickery to misconceive investors and exchanges alike to using and allowing Tether to propagate.
Irregardless of Tether being a fraud, it is single handedly the biggest threat to the crypto markets simply because it extracts liquidity from all exchanges, is non-redeemable, and asset inflates the valuation of Cryptos while also tying each coin together under Tether Usage. All of these factors will gradually raise a ‘critical point’ determined by its own market cap. Thus resulting in liquidity issues for all parties involved, and also preventing people from cashing out.
Also, don’t use financial derivatives to short Crypto or whatever. Because even if you made money, you’d probably not be able to cash out due to liquidity issues. Of course, this isn’t Valid Anything Advice. But you know.
Tether, of course, benefits from tying all exchanges and all associated/available crypto coins by eating their liquidity. Tether itself is centralized and have opaque practices. Thus Tether is centralizing and assimilating Crypto and putting an end to Decentralized finance until a new regulated protocol is in place.
Crypto-fiat will be a the death of ‘freedom’ as you know it. And arguably, if the federal government were to create a similar Tether coin, then it could arguably bring all of Crypto under regulated markets. . . But of course, they would piss off a lot of people if they did. But no one has stopped Tether so far. so. . .
It’s like fighting shit coin fire with shit coin fire.
This makes the Digital Yuan and other Stable-Government-backed-Fiat-Coins even more imperative in the financial Arms Race for that Civ win.
Here are some great side reads;
Here is a One-shot by a Crypto Anonymous that raised valid concerns. I didn’t read it but I looked at the pictures and called it good. If, however you are interested in Tether for whatever reason, then this is a MUST read.
Also a proponent to anti-bitfinex, this twitter page (Bitfinex’ed) is lit and makes sense on bear thesis to Ponzi schemes of stable coins in general. In fact, it points out some great data points that if you connect the dot, people will think you’ll have a Cassandra complex. It’s cool.
Also while I’m handling twitter handlers from not fed handlers, uhh, wait, whut. I mean, check out Stablecoin Printer. It’s good.
The NYAG investigation for read.
Financial Times Opinion by Jemima Kelly
This long ass Tether thread by Stephen Diehl.
This article by Patrick McKenzie
This recent article about the flow of USDT to exchanges and how it’s really just a money laundering cartel.
Here’s a reddit post. I just read the bold werds. Me smart.
This Single Lunch article by Matt Ranger that points out liquidity issues from absence of bots on multiple exchanges and talks about how Tether is doing essentially what I covered in Scenarios 1, 2, and 3.
Here’s the Wolf on Wall Street Talking about Tether.
Honestly, I recommend re-reading this article with what you know now, to reconnect the dots and truly comprehend how fucked things could be.
Just to reiterate
I’m not saying that the Crypto market is doomed or anything,
Only that there’s some fucky shit going on.
And that if it doesn’t run into a bull run soon, it’s probably not going to have a good time. Due to the possible liquidity issues of Tether-weighted exchanges. (meaning that Tether has arguably tied the exchanges locking them down and drying up their liquidity like an abusive spousal partner that lies, cheats, steals, and siphons wealth like a vampire).
Crypto itself is a beautiful technology, the human software architectures and financial models used to pilfer and extract wealth are not so beautiful.
Honestly, I want to love Crypto but it has the same problem that fiat has. Fucking Humans. Especially their greed.
Anything for a quick buck I guess.
Also, if Crypto-stable-coin was properly pegged with full disclosure and transparency, to fiat. Then that would upgrade fiat in a way to make it a reserve asset with actual equity. Much better, in the sense that it would strengthen the Fiat economy and Central Banking’s power. I’m not an economist but a 1-to-1 Crypto Coin to USD is probably not the way to go. You could create more reasonable liquidity with a 100 to 1, idk, call it the PENNY COIN (it’s a joke, jeez) and shave micro-fractions of pennies off each transaction. You’d be stupid rich if you have a $60 Billion market cap like now.
A Path for redemption for Tether;
Now, there’s actually a way to solve this issue. It’s not easy, but its a mess that can slowly come undone and help prove that Tether AND Crypto isn’t a ponzi scheme.
In order for it to fix the crypto markets, Tether is going to have to have the necessary funds to back up their market cap.
- Which means they’ll either have to Admit they don’t have the funds and cause a crash to recover, OR find a way to Raise capital or get more money and hope it’s not as stressful as Uncut Gems. This part will no doubt involve the destruction of Tether Coins to match that of their actual reserves.
- Then they can start being honest and disclosing their real backing and reserves with an actual auditing team. Or at least have the actual Fiat or Equivalent Current Banking standards of collateral. Like please don’t let commercial papers be any part of your reserve (unless it’s lumber or some other real commodity futures that’s stably high as fuck for no reason).
- And Tether would be smart to THEN also allow specifically Exchanges to Redeem Tether for USD with REASONABLE rates, thereby allowing liquidity into the exchanges and markets.
- Follow these steps in the order given, and you should come out okay. But you should also consider things that a random idiot online didn’t consider, seeing as there are probably better ideas than just this.
- Like maybe invent steps where you burn your coin gradually overtime by repurchasing, thereby matching “YOUR (Tether’s) OWN SELF REGULATED” Set Reserve requirements.
Of course, if none of this happens, then Tether goes down with (bringing?) the rest of them. It’s only a matter of time if you piece together the entirety of this article (or read the TLDR).
Tether will end up fucking over the entire Crypto market.
And for the love of crypto, please do the right thing.
(Also, if they -Tether- doesn’t do the right thing. The next best thing is to have Tether Delisted from all Exchanges to protect Crypto. But those exchanges probably won’t because short term
greed gains is what their short sighted sights are focused on and not a longevity prosperous or wealthy future).
Irregardless is a word, all words are made up, if you think irregardless isn’t a word yet you knew the meaning of my usage and understood it to be separate from the word ‘regardless’ than you’re big dumb.
Ironically, Tether provides liquidity to the market without itself having any. LMAO. Fucking gold.
All of these opinions are false and backed by opinions. Literally, just scroll up, it’s referencing opinion piece after opinion piece backed by some actual verified and peer reviewed journalism. But you can ignore that.
I hated writing and investigating any of this baloney, it took about two weeks of writing and reading basically every article and statement linked therein. So I’m arguably more read than most, but as a warning, I’m still retarded.
For instance, I repeat myself on multiple issues throughout on multiple occasions. But we learn best with repetition.
I’m just tired boss, I’m sick and tired of people being ugly to eachother.
Well, I like the idea of bitcoin and crypto, we just happen to be collectively stupid and retarded with this technology. Where we now are in an unregulated era of unchecked human greed propping up Ponzi schemes after Ponzi schemes. This is why we can’t have nice things.
As much as I want to be bullish on Crypto, we need great leadership to stake their name and networth on the line to actually create something with intrinsic equity, instead of get-rich-quick pump-and-dump Shit Coins.
Anyways, I’m going to go sit on an unlacquered-unfinished chair, and hire some covid strippers to visit as a door call so they can grind on me while I get ass splinters. This is the way.
I don’t take myself seriously, I also don’t take Tether Seriously, or life even, so enjoy what you want, when you can;
*Not Valid Financial, Legal, Life, or Any Advice
On a side note, I woudn’t mind creating a stock exchange backed by crypto,
True and transparent, the settling and clearing is done in the ledger of the crypto,
and there would be no way to naked short it.
Well, atleast in theory, anyway.
One day, I may disrobe my rags and join high Falutin society. . . All to slide right back down to rock bottom. That’s how slides work, climb to the top and slide down. Duh. (The fact that I’m explaining slides to you speaks tremendous volumes on our collective intelligence. You so smaht).