[dasher]

(02-05-2018 08:51 AM)Travel Museums Wrote:  

Tether allows you to easily trade without calculating the radical movements of BTC/ETH against the currency you’re buying/selling.

During high up/down volatility (which is when I like trading) I was willing to eat the fees of trading into tether first to avoid losing all my profit to a simultaneous movement in an alt pairing (BTC or ETH).

Or as was as often the case, I kept my money in tether for days, weeks, months, without switching completely back to fiat. I set buys/sells in tether. Why? Setting those orders in BTC/ETH pairs screwed me time and again when they moved hard in either direction against the dollar.

This is what the fight is really about. Lots of money being locked up in tether is equally bad for other cryptos and fiat. So it’s getting hammered from hardliners on both sides.

The solution is obvious. Allow unlimited tether trading and zero tether withdrawal. It’s a “fiat crypto” used for transactional convienience (if that makes sense).

What's the value prop of tether if you remove the illusion that it can be turned into an actual dollar?

[Travel Museums]

Nothing

[Lampwick]

This is probably very bad.

Quote:

Chief Strategy Officer of Bitfinex and Tether Is Departing
By Matthew Leising
June 22, 2018, 2:41 PM PDT

The chief strategy officer of cryptocurrency exchange Bitfinex is leaving the company.

“As Bitfinex pivots away from the U.S., I felt that, as a U.S. person, it was time for me to rethink my position as a member of the executive team,” Phil Potter said in an emailed statement. He’s also stepping down from the same role at Bitfinex affiliate Tether Ltd., which issues a digital token.

Bitfinex, one of the largest virtual-currency markets, has been a particular mystery in the crypto world since it lost its link to U.S. banking when Wells Fargo & Co. ending their relationship. Tether, a digital currency traded on cryptoexchanges worldwide, has faced its share of questions as well, particularly whether it in fact holds one dollar for every Tether in circulation as it claims. Earlier this week, Tether released an analysis of its bank accounts by a law firm it says shows it had adequate dollar reserves. The report wasn’t an audit.

“Phil has been instrumental in developing our business as a key senior team member over the past four years,” Jan Ludovicus van der Velde, chief executive officer of both companies, said in the emailed statement. “Bitfinex will continue to focus on strategic global initiatives while Phil pursues other opportunities.”

Reuters earlier Friday reported that Potter was leaving.

https://www.bloomberg.com/news/articles/...-departing

[Lampwick]

The prices for BTC are increasingly diverging between Tether and non-Tether exchanges.

For example, compare the current BTC prices on these two exchanges:

Bitfinex: $6,711.30
Coinbase Pro: $6,380.00

Users on Bitfinex can't cash out USD due to the exchange's banking issues, and they are instead buying Bitcoin to get their money off the exchange. This is causing the BTC price to rise on Bitfinex. The effective price of Tether is around $0.95 to 0.96 USD, and has been slowly sinking over the past week or so.

Kucoin has also disabled Tether deposits and withdrawals just a matter of hours ago.

The Tether peg has broken before, and to a greater extent. But it's a good idea to take your money off of all exchanges right now. If Tether continues to slide, it will likely be a contagion that will spread to most exchanges.

[Lampwick]

This might be a good time to get ready to cash out to fiat. As the Bitfinex BTC price rises, the rest of the market follows due to bots, at least for now. If Tether's slide continues, there may be a big pump, and most people will think it's good news at first, until reality sets in.

[Giacomo Casanova]

Or could it be a sign of the end of bear market? Anyway I would be very cautious now, ppl are surely buying BTC to get rid of Tether and this is not sustainable.

[Tactician]

(10-15-2018 01:45 AM)Lampwick Wrote:  

This might be a good time to get ready to cash out to fiat. As the Bitfinex BTC price rises, the rest of the market follows due to bots, at least for now. If Tether's slide continues, there may be a big pump, and most people will think it's good news at first, until reality sets in.

It just hit. I'm very sleepy and I don't have a plan for this.

Edit: I'm leaning towards "everything is fucked," (at least in the short-term) but will figure this out tomorrow.

[young_money]

What’s the consensus on tether now for storing dry powder? I’m wanting to limit transaction costs but mainly to be able to pull the trigger on a moments notice from a stable coin. Leaning towards Binance TUSD.

[SamuelBRoberts]

Pretty good odds that if tethers were shut down for some reason Binance (Or Bitfinex, who owns tether) would reimburse holders to save themselves legal headache.
It's a risk to hold them but it's not as much of a risk as we used to think.

[Vincent Chase]

Agree if you hold tether better to hold it at an exchange in case it does go belly up and you may be reinbursed by an exchange.

Personally best strategies is not to be all in on tether regardless, options are (without going to actual fiat):
1) Store your shit in coinbase USD wallet or other wallet.
2) Split funds between the stable coins, so a split between tether, trueusd and pax (and anything else which has volume). Minimise risk of something dying overnight and you can sleep better.

[JoSuado]

Does anyone know a Telegram group that gives good signals for free?
If anyone knows, private message me, please.

[Lampwick]

The Tether marketcap is now back to an all time high of over $2.8B. Tether has also recently admitted that they aren't backed 1:1 with USD, they are backed by "reserves".

Tether website on 2019/02/19:

Quote:

Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.

Tether website now:

Quote:

Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.

That's a lot of fine print nowadays. So Tether is printing USDT and loaning it out in exchange for "other assets and receivables" as collateral, probably crypto. This is looking more and more like an interdependent house of shit, not unlike mortgages in the last financial crash.

[Jaydublin]

What do you guys think of USDC vs USDT?

[Lampwick]

(04-25-2019 09:32 AM)Jaydublin Wrote:  

What do you guys think of USDC vs USDT?

All other stable coins are largely irrelevant. Almost all of the volume in the crypto market is USDT. It's a poison that has been pumped into the system.

Think about it this way. In 2017, let's say you were running an exchange. You know Tether is a scam, but all your competitors are listing it and are making money. So your choice is to go out of business, or become complicit in the scam.

Binance has gleefully become the biggest co-conspirator in the Tether scam and the related money laundering operation. They opened an exchange in Uganda, a money laundering haven, that's all you need to know.

All exchanges are now interdependent on one another due to Tether. It's all a bunch of loans backed by crypto in a bunch of circular dependencies. It really is a powder keg.

Exchanges are becoming more desperate and will fail, triggoring a wave of other exchange failures. Look at Coinbase. Remember when they had a bunch of guidelines about which coins they would list? Now they will list anything to try to get new USD into the system. They just closed their institutional business and laid people off.

[Jaydublin]

^^ Thanks for the breakdown. I was talking more in terms of security but I see what you are getting at.

So what does the crash look like? A domino effect on exchanges?

[Lampwick]

(04-25-2019 04:00 PM)Jaydublin Wrote:  

^^ Thanks for the breakdown. I was talking more in terms of security but I see what you are getting at.

So what does the crash look like? A domino effect on exchanges?

It looks like this:

https://finance.yahoo.com/news/ny-attorn...43545.html

Sell now.

[Jaydublin]

Are you saying sell Tether or all Crypto? I've stayed away from Tether form the get go.... just the general idea of it makes it too easy to be a scam.

[[email protected]]

I speak for everyone that knows anything when I say don't touch USDT with a ten foot pole. Just use USDC, TUSD, PAX.

Looks like the time bomb has blown up today. This will make the market dip for a while, not sure how long.

[Lampwick]

(04-25-2019 06:10 PM)Jaydublin Wrote:  

Are you saying sell Tether or all Crypto? I've stayed away from Tether form the get go.... just the general idea of it makes it too easy to be a scam.

All of crypto as soon as possible. Exchanges will start to block withdrawals.

[MrLemon]

Great thread. I didn't know anything about the Tether situation before this. Now, we see a 5% drop in BTC instantly.

Let me ask, for those of you who understand this. Does a tether-based crash mean long term slump for BTC, or just a dip? I'm only interested in holding for 2+ years but could put off more purchases if there's a dip likely.

[Lampwick]

https://www.wsj.com/articles/bitfinex-us...?mod=rsswn

Quote:

Bitfinex Used Tether Reserves to Mask Missing $850 Million, Probe Finds
New York attorney general alleges cryptocurrency-exchange operator drained popular coin’s reserves to conceal missing funds
New York State Attorney General Letitia James holds a press conference in New York City March 28. Photo: timothy a. clary/Agence France-Presse/Getty Images
By Paul Vigna
Updated April 25, 2019 6:43 p.m. ET

A cryptocurrency exchange that claims real dollars back its popular digital coin Tether raided those reserves to cover up $850 million that went missing, the New York Attorney General’s office said Thursday.

State Attorney General Letitia James said Hong Kong-based iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd., has been commingling client and corporate funds to cover up the missing funds, which occurred in mid-2018 and hadn’t been disclosed publicly.

The attorney general’s office said it has obtained a court order directing iFinex to stop moving money from Tether’s reserves to Bitfinex’s bank accounts, halt any dividends or other distributions to executives and turn over documents and information. The coverup drained at least $700 million from Tether’s reserves, according to the attorney general’s office.

David Miller, an attorney at New York law firm Morgan Lewis, which represents the companies, declined to comment, and representatives of Bitfinex and Tether weren’t immediately available.

The attorney general’s findings emerged from an investigation into cryptocurrency exchanges that it launched in 2018 and is continuing. A report in September warned that many exchanges lacked basic safeguards and left consumers vulnerable to exploitation by market manipulators.

A so-called stablecoin, Tether is purportedly backed one-to-one by U.S. dollars. Yet the firm has never released a public audit showing it has the reserves to back the coins in circulation, leading many to question whether the funds exist.

Tether has marketed the coin as a way to get both the safety of the dollar and the speed and anonymity of a digital currency. Its market value has risen steadily over the past two years, to $2.8 billion from about $10 million at the beginning of 2017.

It has become a major source of liquidity in the cryptocurrency market. About 80% of all bitcoin trading is done in Tether, according to data from research site CryptoCompare.

The attorney general said Bitfinex’s problems began in 2018, when it handed over $850 million to third-party payments processor Crypto Capital Corp. to handle customers-withdrawal requests. Over the months that followed, Panama-based Crypto Capital failed to process the orders, the attorney general said.

Representatives of Crypto Capital weren’t immediately available for comment.

By November of that year, according to people close to the attorney general’s investigation, Bitfinex determined that it had permanently lost access to the $850 million. To hide the missing funds, Bitfinex and Tether engaged in a series of maneuvers that drained Tether’s reserves, the people said.

A gap of that size would represent a major portion of Tether’s reserves. Tether currently claims on its website that the coins it issues are backed by reserves that include currency, cash equivalents and other assets and receivables. The language was altered in March; it previously claimed the reserves were 100% in currency.

[redbeard]

There's two factors that'll determine how much the Tether situation affects crypto as a whole:

1. How f***ed Bitfinex is

This is hard to judge because we don't know what's going on behind the scenes. Although this story sounds bad, and the market adjusted accordingly, it's possible there is no funny business and everything continues as normal. "Mewn it"

However, if Tether is forced to shut down it'll be a literally bank run on the exchanges as users try to dump their worthless tokens. The exchanges will also have to rebuild using other fiatcoins (and it'll be a PR nightmare). Dump it.

2. How much users migrate to alternative fiatcoins

If traders switch to PAX, USDC, or GUSD, this USDT drama should disappear overnight. Unfortunately, it seems many of my trading friends are still using Tethers without hesitation. Sigh.

Will this be the catalyst that wisens everyone up? Hopefully, but we're yet to see how dependent the market really is on Tether.

Overall: Tether situation *could* be really bad for crypto, but you should be able to protect yourself as long as you stay away from fiatcoins, trade the chart, and prepare for downside.

[MrLemon]

(04-25-2019 08:55 PM)redbeard Wrote:  

There's two factors that'll determine how much the Tether situation affects crypto as a whole:

1. How f***ed Bitfinex is

This is hard to judge because we don't know what's going on behind the scenes. Although this story sounds bad, and the market adjusted accordingly, it's possible there is no funny business and everything continues as normal. "Mewn it"

However, if Tether is forced to shut down it'll be a literally bank run on the exchanges as users try to dump their worthless tokens. The exchanges will also have to rebuild using other fiatcoins (and it'll be a PR nightmare). Dump it.

2. How much users migrate to alternative fiatcoins

If traders switch to PAX, USDC, or GUSD, this USDT drama should disappear overnight. Unfortunately, it seems many of my trading friends are still using Tethers without hesitation. Sigh.

Will this be the catalyst that wisens everyone up? Hopefully, but we're yet to see how dependent the market really is on Tether.

Overall: Tether situation *could* be really bad for crypto, but you should be able to protect yourself as long as you stay away from fiatcoins, trade the chart, and prepare for downside.

"Trade the chart" --fuck. Way outa my league.

[godfather dust]

The whole crypto market is fucked if tether collapses, I'm reading the (useless) reddit cryptocurrency forum because of these events and am amused that almost no one there sees this (and the ones that do are probably being censored.)

[Jaydublin]

^^^ can you explain why it would collapse crypto?