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Cryptocurrency market implosion - Tether (USDT)


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Not sure if anyone has been following the Tether story, but it looks like we're going to see a severe crisis event across the entire crypto markets. 

The market is being propped up and manipulated by fantasy US Dollar Tether tokens which will soon be exposed as unbacked and worthless. When this happens there will be a wholesale  stampede for the exits. No doubt exchanges will be shut down and confidence will be shattered. 

If you've got any significant crypto exposure you definitely need to keep a close eye on this one. 

https://www.reddit.com/r/Tether/

http://jamescrypto.com/the-difference-between-inflow-and-market-cap-and-how-it-relates-to-tethers/

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I must admit I don’t understand how this affects things - is it any different than an exchange propping the market using their own money?

Of course this is assuming that the USDT has been backed by dollars; what would be interesting is if they backed it by other cryptos which have plummeted in value!

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I was intrigued to read about this, not knowing much about Tether - i was under the impression it wasn't backed at all.  That Reddit seems to be full of doom, so not sure if its a reflection of a problem or a sounding chamber for people complaining about a perceived problem.  The concern seems to be that Tethers are being issued without being backed, but there's nothing to substantiate this is occurring.  It seems feasible to me that the exchanges themselves could be liquidating Bitcoin assests to $ and converting to Tether to maintain parity (maybe that is a potential problem, but not one voiced).

The blog raised a very interesting point about the amount of actual capital inflow to crypto currency, but then seems to make a leap that Tether is used to inflate the price.  It's used to park funds in between trades and transfer between exchanges, not actively traded.  Its all an odd conclusion to arrive at when the rest of cryptoland is back by nothing by hot air (generated by vast arrays of miners), to pick up on whether or not one currency is fully backed by fiat or not. 

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9 hours ago, Martlet said:

I was intrigued to read about this, not knowing much about Tether - i was under the impression it wasn't backed at all.  That Reddit seems to be full of doom, so not sure if its a reflection of a problem or a sounding chamber for people complaining about a perceived problem.  The concern seems to be that Tethers are being issued without being backed, but there's nothing to substantiate this is occurring.  It seems feasible to me that the exchanges themselves could be liquidating Bitcoin assests to $ and converting to Tether to maintain parity (maybe that is a potential problem, but not one voiced).

The blog raised a very interesting point about the amount of actual capital inflow to crypto currency, but then seems to make a leap that Tether is used to inflate the price.  It's used to park funds in between trades and transfer between exchanges, not actively traded.  Its all an odd conclusion to arrive at when the rest of cryptoland is back by nothing by hot air (generated by vast arrays of miners), to pick up on whether or not one currency is fully backed by fiat or not. 

It's not very clear what's going on behind the scene with Tether, but the potential for widescale fraud is there. 

Coins are created from nothing are being sent to the exchanges to provide "liquidity" for people moving in and out of Bitcoin and Altcoins. 

There is no direct redemption from Tether to fiat and there's no audit that the Tethers have anything backing them up either. 

It's therefore quite possible the creators can simply transfer Tether into Bitcoin and then exchange directly for fiat. It's also possible these freshly printed coins can be used for a wide variety of fraudulent price manipulations. 

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My immediate thought when i clicked on this link is that this is propaganda. A 'blogger' has posted criticism, experts say, then i see Jamie Dimon's mugshot on the page. Since when did people really think these coins were backed? They have uses, some have to be mined, well they don't have to be mined but they are. Smacks of propaganda to rig prices. This could still take price down but my feeling is it is forming a base for another push up.

2 hours ago, C12 said:

 

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

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The article has some fairly basic errors and inaccuracies, I'm surprised a qualified economist has put their name to a report with such conclusions - or is it just Express mis-reporting?  The biggest fib is that $100m is being created daily.  As Tether has a market cap of 2.2bn, thats represents only 22 days of printing.:rolleyes:  The argument seem to be that $18m net inflow is required (doesn't say from where this number comes) and Tether has 100m increase, therefore if you take the Tether out, 80% of inflow disappears. Doesn't really stand up, so I'm assuming there is more in the original report.

However the most blatant flaw is the omission, as highlighted by @sixgun, that none of the cryptos are backed. Every week hundreds of millions of tokens are being generated and sold, rather dwarfing the claimed problem in Tether. 

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Tether is used as a place to park crypto capital and nothing more. Talk of an implosion is massively overstated. If tether itself began to collapse, then people would simply move their money into BTC instead. I think people underestimate the number of idealogues in this market. This is not a tulip bubble, there are hundreds of thousands if not millions around the world who believe cryptos are the future. If tether falls, sure it will spook alot of people, but the core base of backers will never give in.

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i see this in my news feed this morning

"More crypto regulation after Coincheck heist?"

https://seekingalpha.com/news/3325923-crypto-regulation-coincheck-heist?ifp=0

The negative news on cryptos is likely to keep stepping up. More 'regulation' - and how might more regulation prevent 'hacking'?

The USD and other fiat paper are inexorably sliding, gold is going to breakout this year; so they certainly would like to smear the cryptocurrencies and introduce some 'helpful' regulation.

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

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There are a large number of anti - crypto articles on that site from the last few days aren't there?

Makes me very suspicious so soon after the mainstream media started writing about blockchain in a big way.

For someone new to cryptos, and as cynical of the press as I am, it still works - it makes me feel more apprehensive about jumping on board even though my head tells me it's a good time to do so.

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The Tether / Bitfinex situation once resolved will most likely be the finishing blow for the current cypto market cycle. I'm guessing Bitcoin will spike down to $5k and potentially much lower. 

I'm bullish on Cryptos over the next 3 - 5 years and beyond and I see the 2017 bull run will just be a tiny speck as to where they will potentially go. 

The market now needs time to mature. This current system which is packed with ponzi scams and pump and dump schemes need to be washed out and rebuilt on solid foundations. 

 

 

 

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58 minutes ago, C12 said:

The Tether / Bitfinex situation once resolved will most likely be the finishing blow for the current cypto market cycle. I'm guessing Bitcoin will spike down to $5k and potentially much lower. 

I'm bullish on Cryptos over the next 3 - 5 years and beyond and I see the 2017 bull run will just be a tiny speck as to where they will potentially go. 

The market now needs time to mature. This current system which is packed with ponzi scams and pump and dump schemes need to be washed out and rebuilt on solid foundations. 

 

 

 

Fair assessment that. If not already invested would you recommend a wait and  see approach and let dust settle?

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12 minutes ago, Oystonout said:

Fair assessment that. If not already invested would you recommend a wait and  see approach and let dust settle?

I've taken all my coins off the exchange and onto a secure hardware wallet. I don't have a lot of exposure so very comfortable to watch it all play out.  

If I'm right on the fallout fromTether I'd guess the market might flat-line for quite some time before cash moves back in. 

I could be wrong and we go to da moon right now, but I'm not taking the risk. I see better buying opportunities ahead. 

 

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Well, i would find it deeply and comically ironic, if the thing that brings down Bitcoin is controversy around a coin that has some cash backing.  Only yesterday a ICO called Dadi created itself $50m within an hour of launch and thats considered a massive success. 

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