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USDT and Bitcoin: Could the USDT scandal crash BTC?

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posted on Jan, 30 2018 @ 04:10 PM
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Bitfinex/Tether Subpoenaed Bloomberg

I am not invested in USDT and would never recommend anyone be invested in an inflationary peg to the USD that directly conflict with US Government monetary policy, and the Congress' power of the purse.

From what I understand so far, Tether isn't a stand-alone company anymore. They used to be an independent company until Bitfinex bought Tether and started using USDT on their site as pairings for other coins. However, in this process, something shady has been or is going on. Some people think its massive embezzlement, others think it's a Ponzi scheme.

No one knows exactly how long some of this stuff has been going on. But there are three major problems here that I can see:

1. They created a counterfeit USD as a crypto peg to buy other currencies, and escape from currencies to a stable coin. That's patently illegal.

2. They had been conducting an audit that they never finished and an outstanding $2.3 billion is in question.

3. They think Bitfinex was printing USDT(since it is naturally inflationary) to pump the coin and buy BTC with it, creating what amounts to billions of false demand. No one knows the extent of this, and as a result, could crash Bitcoin.

This could be really bad. Does this mean that all other cryptos are in danger? Maybe. Depends on what they are. There are other exchanges that use USDT as one of their pegs, but the scope is limited to only a few(like on Binance), but those exchanges don't OWN tether and they have no capability of printing it like Bitfinex does.

S is about to HTF. I'm still holding a few cryptos that I think will weather the storm. Bitcoin will survive, but it's gonna be a brutal next few weeks.
edit on 30 1 18 by projectvxn because: Editing grammar mistakes and mistypes




posted on Jan, 30 2018 @ 04:13 PM
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Thanks for the heads up. I've still yet to break into the crypto market, so this will be a good heads up on the dynamics of it.



posted on Jan, 30 2018 @ 04:14 PM
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I'm not sure what to think.

It does explain Bitcoins sudden rise over the last year.

But it doesn't explain Ethereums, and others.



posted on Jan, 30 2018 @ 04:14 PM
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a reply to: Arnie123

I'm trying to stay on top of it.

There's a lot going on.

All the people who bitched about government regulation are about to find out why we regulate this kind of crap.



posted on Jan, 30 2018 @ 04:19 PM
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a reply to: projectvxn

Good God, Tether/Britfinex sounds like the Fed-missing money (trillions instead of billions) creating money and a ponzi scheme that threatens to topple other currencies.

And crypto in general is a way to circumvent the currency, sort of. But at the end of the day to buy kitty litter and dish soap you need dollars.

If crypto is able to thrive it will be because it is allowed to.



posted on Jan, 30 2018 @ 04:20 PM
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originally posted by: Arnie123
Thanks for the heads up. I've still yet to break into the crypto market, so this will be a good heads up on the dynamics of it.


Heck you may be able to go shopping through the debris after this bump in the road and pick up some good in use coins on the cheap.



posted on Jan, 30 2018 @ 04:21 PM
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originally posted by: neo96
I'm not sure what to think.

It does explain Bitcoins sudden rise over the last year.

But it doesn't explain Ethereums, and others.



Depends on how much was printed.

With 2.3 billion you could certainly make a big impact. But I'm thinking this was targeted at Bitcoin, so my worry for other cryptos is pretty limited.

If BTC does crash down to pre-run levels, then I'm buying a #TON of BTC.



posted on Jan, 30 2018 @ 04:24 PM
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a reply to: projectvxn




If BTC does crash down to pre-run levels, then I'm buying a #TON of BTC.


Likewise and it'll make $GBTC cheaper than the split just did.

Twofer.



posted on Jan, 30 2018 @ 04:32 PM
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a reply to: projectvxn


They created a counterfeit USD as a crypto peg to buy other currencies, and escape from currencies to a stable coin. That's patently illegal.

So is Fiat Currency sooo...



posted on Jan, 30 2018 @ 04:40 PM
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a reply to: intrptr

Fiat currency is not illegal.



posted on Jan, 30 2018 @ 04:44 PM
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originally posted by: projectvxn
a reply to: intrptr

Fiat currency is not illegal.

Not anymore...

Edit: But just out of curiosity, are you saving up paper dollars or silver, and why?

I already know the answer, you told me once, right here.
edit on 30-1-2018 by intrptr because: edit:



posted on Jan, 30 2018 @ 04:49 PM
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a reply to: intrptr

Silver of course.

But I'm still holding my cryptos.

I did say that I don't invest in BTC, there's a reason for that, and this is just another one.
Edit:

I like money I can use. I consider XRP, Dash, ETH, and others a currency I can use. Bitcoin is slow and expensive even for fractional transactions. It's a store of value, but like gold, if you buy it in illegally printed currency, you crash the price. No one really does this with silver, so I tend the buy the silver versions of assets.
edit on 30 1 18 by projectvxn because: (no reason given)



posted on Jan, 30 2018 @ 04:53 PM
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a reply to: projectvxn


Silver of course.

Rest my case. Good investment strategy

No matter what happens to the Game of Monopoly, you will still be holding real money.



posted on Jan, 30 2018 @ 05:04 PM
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a reply to: intrptr

I will still be holding cryptos too. Let's not take my statements out of context.

I've been a proponent for silver since I was a teenager.



posted on Jan, 30 2018 @ 05:08 PM
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a reply to: projectvxn
Tether is marketed as a cryptocurrency backed by the USD. 1 USDT= $1.00 in theory. Sometimes 1 tether will dip to .99 or .98 or conversely rise to 1.02, 1.03 when volume bubbles happen and the reserves can't be balanced fast enough, from what I understand. I have used tether as a market indicator and as a way to basically 'cash out' when I think a dip is coming. It's easier than selling Bitcoin for actual USD when you know you will be back in Bitcoin shortly.

Tether has a market value about 1.5% of Bitcoin. I don't see how tether can be used to manipulate the market. The real question is how the reserves are managed. An audit would give transparency that I think Tether especially needs. If Tether proves to be cooking the books it would be the fall of Tether and it's managers and not likely more than a ripple in the overall cryptocurrency valuation.

This could create a new precedent for cryptocurrency oversight. That's what I believe is the real motive for investigation.



posted on Jan, 30 2018 @ 05:16 PM
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a reply to: SouthernForkway26

If the owners of Tether are PRINTING USDT without the corresponding actual dollars, that's a problem.

If no one can account for or locate where they keep the actual USD that is supposed to "back it" and no audit has been produced or finished, with 2.3 billion outstanding, there is a problem.

You also cannot create a currency like the USDT specifically BECAUSE of problems like this. USDT maybe a crypto, but it is still inflationary, and it is still, in every legal sense, a counterfeiting operation against the USD.



posted on Jan, 30 2018 @ 05:24 PM
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So to be perfectly clear here:

It is my personal belief that Tether/USDT(a crypto "backed" by the US dollar) is a counterfeiting operation whereby the owners(Bitfinex) print USDT without the actual corresponding USD in reserve, to then buy Bitcoin, driving the price up.

This operation currently stands at 2.3billion dollars of "missing" USD. That USD never existed, in my opinion. It was all unbacked printing of USDT, thereby creating $2.3 billion dollars in false Bitcoin demand.

This could crash bitcoin if true.
edit on 30 1 18 by projectvxn because: (no reason given)



posted on Jan, 30 2018 @ 05:53 PM
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a reply to: projectvxn

A crash is a temp set back.

Crypto while young is here to stay, and there are a few, and yes a few coins that are going to be very valuable. These coins have a use, not a pie in the sky theory, but for real use.

Bitcoin was the trail blazer and will be with us in some capacity for a long long time.



posted on Jan, 30 2018 @ 05:54 PM
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no it won't what does tether have to do with BTC



posted on Jan, 30 2018 @ 06:07 PM
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a reply to: toysforadults

Read the thread and you'll understand. Read the source material.



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