Tether price manipulation

The problem is that in the early days of @Bitfinex&#x27;ed this was all a bit of a sideshow because there was genuinely large interest from retail and the outcome of crypto was far less certain.<p>However three years on, crypto still does not have a &quot;killer app&quot; and is 99.99% used for speculation. Bitcoin&#x27;s narrative has had to morph from &quot;digital currency&quot; to &quot;digital gold&quot;.<p>But in the depths of the March panic, Tether jumped the shark in order to backstop the entire crypto ecosystem, and they can never put that genie back in the bottle. Much like the Fed who cannot stop monetizing US deficits for fear of letting yields explode, the Tetheral Reserve must continue to print USDT in order to support prices. Exchanges cannot let this fail since the vast majority do not have access to the bonafide banking system and thus scrappy users must devise &quot;fiat onramps&quot;.<p>There are many theories about why, the predominant one being that iFinex know they are screwed, and are making one last cash grab before presumably disappearing. This sounds fairly reasonable if the entire operation is indeed a sham, but it means there is effectively no upper bound to BTC prices because the denominator in 90% of the market (USDT) is effectively zero.<p>Tether has become too big to fail. Bitcoin now finds itself a high tech manifestation of the very thing that Satoshi sought to address.

I agree that a Tether reckoning is coming, but point #10 of that thread is the most important: it could be weeks, months or _years_ before it&#x27;s fully corrected, so be super super super careful about using Tether as a reason to short Bitcoin...<p>&quot;The market can remain irrational longer than you can remain solvent&quot;

OP gives no proof that Tether is not holding 1:1 reserves. There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. Bitcoin price dropped to $4.000 last year and Tether exchange rate has held pretty well. It is important to mention that USDT is still liquid despite the lack of USD on&#x2F;off-ramps. People regularly sell USDT on the offline market, and can exchange to USDC on many exchanges.<p>&gt; But Tether is printing so much money.<p>So is USDC, and the price of Bitcoin is going higher. This means Bitcoiners have lots of value in Bitcoin and some of them are going to convert that value to USD. They are mainly using USDT for that, for whatever reason.<p>&gt; Tether printing press is driving Bitcoin price.<p>Wrong. My proof for that is &quot;where is the premium to buy Bitcoin&quot;. In a very liquid market (which for the most part, crypto is), prices should be the same up to the costs (transaction and banking fees). Prices have been higher in Coinbase during this run. As I am typing right now, Coinbase prices are 50-80 dollars higher for Bitcoin. GBTC is even more ridiculous with 10-15% premium on price (but also GBTC is less liquid&#x2F;arb-able). This signifies that demand is coming from US retail and institutional investors.<p>&gt; Tether is holding USD as securities&#x2F;derivatives&#x2F;whatever.<p>All of them are. See: <a href="https:&#x2F;&#x2F;omarabid.com&#x2F;usd-stable-coins" rel="nofollow">https:&#x2F;&#x2F;omarabid.com&#x2F;usd-stable-coins</a>

&gt;4) How the scam works:<p>&gt;Tether can print infinite amounts of (worthless) $USDT.<p>&gt;They then inject this into BTC, ETH, LTC, (and others) to cause prices to pump.<p>&gt;Notice how during the months they stopped printing Tether, the market moves sideways or drops significantly.<p>&gt;This graph also shows the extent to which USDT plays a role in Bitcoin&#x27;s price action over the years.<p>I don&#x27;t get it. This doesn&#x27;t really prove anything either way. Sure it <i>could</i> be the case that they&#x27;re printing USDT backed by nothing and using it to by cryptos, but it could very well be the case that they&#x27;re printing the USDT in response to real deposits from people who want to get into crypto. Since USDT accounts for a significant portion of the crypto market, it&#x27;d be more suspicious for price to go up without a corresponding large amount of USDT being printed, because that would mean prices are going up without more money being poured into the market.

Can someone please explain to me how Tether is &quot;injected&quot; into Bitcoin? The entire argument seems to hinge on this but it is not (as far as I can see) explained.<p>Are people accepting Tether in trade for BTC under the assumption that Tether will always be exchanged 1:1 for USD when this is not actually the case?<p>EDIT: The answer seems to be yes Tether is 1-to-1 with &quot;I O U $1&quot; and enough people are accepting these IOUs in exchange for BTC that the market is moving because of this.<p>That last part (&quot;the market is moving because of this&quot;) seems so unbelievably stupid to me that I don&#x27;t actually believe it.

The graphs show a strong correlation between printing of USDT and the Bitcoin price rising, but it&#x27;s not clear to me which one triggers the other.<p>Interestingly, USDC seems to follow similar minting patterns, and they post quarterly audits of their books &#x2F; are much better regulated.

When the Bitfinex’d posts came out in 2017, I found them fairly convincing. It seems likely there is something not quite right at Bitfinex and Tether. But I have yet to see any evidence that the scale of “not right” is so large as is frequently claimed. These critiques never seem to address the most parsimonious explanation for periods of increased Tether issuance, which is that they are driven by genuine demand for bitcoin, and much of that demand is routed via Tether.<p>There is ample evidence of the sketchiness of the people behind Bitfinex. But there is also a simple explanation for the behavior of bitcoin and Tether in 202 that involves no conspiracies. Many hodlers bought during the March crash because they saw it as an opportunity to buy at a discount (I am one of these people). The crash coincided with events that should drive up the price of bitcoin over the longer term. Specifically, the creation of trillions of new dollars and what many saw as a new era of much looser monetary and fiscal policy. The idea that demand for hard currencies is increased is totally consistent with this.<p>Compared to 2017, I now believe there is a smaller chance of total tether insolvency and a larger chance of significant but not catastrophic shenanigans.

I agree that USDT is fishy and it may be behind a large percentage of the gains in BTC and the other coins.<p>However, there is also another possible explanation. When investors want to buy BTC they first to go Binance and ask for USDT in exchange for USD. Binance creates new USDT for them. Then they use the USDT to buy BTC (reverse causality). Just saying it&#x27;s possible, but I believe Jacob Oracle to be right.

There is one question to ask here: &quot;Why is so much of the volume in BTC driven by USDT trades?&quot;, i.e. what exactly is so great about Tether that we&#x27;re supposed to believe everyone is actually buying it?<p>It is supposed to be a stablecoin. That&#x27;s meant to be exceedingly boring. Tether is anything but boring, with all kinds of intrigue, lack of transparency about its reserves, law suits and so on.<p>There are a bunch of other stablecoins out there that just seem like better propositions, so why does crypto price action continue to be primarily driven by inflows from Tether?

Might be good to get patio11&#x27;s take on this. He&#x27;s predicted the last 5 tether collapses.

I would trust Tether more if it ever had meaningful outflows in dollar terms, had $1bn or so in the last crash (<a href="https:&#x2F;&#x2F;coinmarketcap.com&#x2F;currencies&#x2F;tether&#x2F;" rel="nofollow">https:&#x2F;&#x2F;coinmarketcap.com&#x2F;currencies&#x2F;tether&#x2F;</a>) but has been generally on an upward march, not what you would expect from a stable coin

Let&#x27;s say you believe that Tether is a complete fraud and will crash the market at some point. How do you take advantage of this? I&#x27;m not myself trading, but I would be interested to know how that kind of short works in practice. From what I understand, that&#x27;s what bitcoin futures can be used for?

Isn&#x27;t this pretty much the same as taking a loan at a bank and buying bitcoins? Couldn&#x27;t the &quot;bubble&quot; be explained by extremely low interest rates?<p>Banks create money out of thin air when you take a loan. The only difference is they destroy that newly created money when you pay the loan back (but keep the interests).<p>See : <a href="https:&#x2F;&#x2F;positivemoney.org&#x2F;how-money-works&#x2F;banking-101-video-course&#x2F;" rel="nofollow">https:&#x2F;&#x2F;positivemoney.org&#x2F;how-money-works&#x2F;banking-101-video-...</a>

So, lets assume this is price manipulation is true. If they print tether, and buy BTC&#x2F;USDT on an exchange than someone else has to go long the other side (USDT&#x2F;BTC). When 600 mil of USDT was printed and was used to purchase 600 mil of BTC&#x2F;USDT, then who purchased 600 mil USDT&#x2F;BTC.<p>It doesn&#x27;t make sense that people who want to cash out of BTC at a certain price level will cash out through USDT because there is no exchange to redeem USDT to USD directly. You have to cash out through USD&#x2F;BTC or USD&#x2F;ETH.<p>There are arbs traders who maintain the peg the USD&#x2F;USDT, but arbs traders will always attempt to have a net 0 position, it doesn&#x27;t make sense for them to hold tether either. Defi flash loans like AAVE and byz offer 0 collateral loans. If they are not using flash loans, then they will post collateral with USD (as this is presumably how they want profits) to short whatever ticker they need to short for the arb play.<p>If bitfinex and tether keep printing tether, someone is holding all this tether. A lot of this is probably held in defi liquidity pools and AMM pools, but the total reserves in these exchanges (Compound, curve, dydx...) is far less than the 600 million printed.<p>Perhaps the same institutions printing are the last holders, but Why would tether and bifinex hold their tether if it is truly a scam? I am confused as to who the last holders of tether are, if people are swapping tether for BTC and BTC for USD. Most people that buy tether (other than people supplying liquidity pools) do so to swap to another token for a real potential of gains, since Tether will never gain in value significantly with a 1:1 peg.

Why hasn&#x27;t anyone forked tether? What happened to the tether issued on bitcoin cash blockchain through omni after the fork of bitcoin?<p>A tether fork can be &#x27;backed by tether.&#x27; The issuer of forked tether would accept 1 tether for one new tether fork. this issuer immediately sells tether to get the risk off their books through an exchange while liquidity exists. When redeeming the tether fork ppl can either get back tether or ~ 1 us dollar. So you effectively have front running the inevitable tether bank run. Sure they have to put trust in this new tether fork. You can steal tether&#x27;s customers that are worried and since the feds seem to have a blind eye towards a company that isn&#x27;t a bank and is most likely practicing fractional reserve lending, you let the free market &#x27;regulate&#x27; tether.

Bernie Madoff ran the same alleged scam for years, including giving interest to people in the fund. It would be even easier to run with a non-interest-bearing fund and you&#x27;d never even notice the money was missing unless there was a bank run.

I&#x27;m no expert but wouldn&#x27;t it make sense that Tether has to mint new USDT pegged to the price of BTC? If BTC price increases, regardless of what reason, the next buyer has to somehow have more USDT than there previously was in the system.<p>- B buys 1USDT for 1USD<p>- BTC sale at 1USDT from A to B<p>- person B now lists their BTC for 3USDT<p>- if person C now wants to buy this BTC for 3 USD, there has to be an additional 3 USDT minted<p>Given new influx of money keeps happening to buy BTC, more and more USDT needs to be printed. Meaning, extra USDT is printed BEFORE the price increases. Because it&#x27;s required to buy. Doesn&#x27;t explain why it&#x27;s seldom burned. Nobody ever cashes out?

What a ridiculous Twitter thread showing absolutely no causality between Tether and Bitcoin. You might as well show that SpaceX rocket launches coincide with a rise in Bitcoin prices.<p>There was a successful SpaceX launch yesterday, and Bitcoin went over $40,000 for the first time. In 2020, SpaceX had its best year ever for successful launches and returns of the first stage, perfectly coinciding with Bitcoin&#x27;s meteoric rise in value. So Bitcoin must be tied to successful SpaceX launches.

To people who think Tether manipulates Bitcoin price: How do you explain Bitcoin doing so well on Coinbase when Tether is NOT ACCEPTED on Coinbase???

I still don&#x27;t quite understand how they can manipulate the price.<p>The price of a USDT is 1 dollar. They give out new USDT for $1 a piece.<p>Sure, they may be spending these dollars elsewhere, thus holding a fractional reserve. Sure this may illegal and get them in trouble.<p>But this doesn&#x27;t effect the dollar value for which these USDT&#x27;s and thus Bitcoins are traded.<p>As long as a USDT is $1, nobody is manipulating the price.

Would we not expect this same pattern if Tether was printed in response to money coming in?<p>Meaning yes, they don&#x27;t have USDT 100 % fully backed, but they aren&#x27;t printing it out of thin air either.<p>What surprises me are the incredible volumes in USDT -- why would anyone ever use USDT instead of USDC, DAI or BUSD? All of them are much more transparent and less risky.

Let me cite <a href="https:&#x2F;&#x2F;tether.to&#x2F;legal&#x2F;" rel="nofollow">https:&#x2F;&#x2F;tether.to&#x2F;legal&#x2F;</a> &quot;Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.&quot;

The twitter thread is utterly fatuous, and another post this morning on reddit laid it out pretty well:<p>&gt; <i>This is just dumb but I&#x27;ll lay it out anyway: The NY AG issued the first Tether subpoena in Dec 2017. The AG got the financial info, found that tether was fully backed by dollars, and that the Tether company lent some of those dollars to the Bitfinex company, which is the basis of the NY AG lawsuit. Bitfinex has since issued tokens to cover the loan.<p>To say that the NY AG got the subpoena info (which would require more evidence than an audit and be under penalties of perjury as well) found no backing and let them continue a ponzi is to say that the NY AG is part of the conspiracy. So enough with the tin foil hattery.</i><p><a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;BitcoinMarkets&#x2F;comments&#x2F;ksvlc3&#x2F;daily_discussion_friday_january_08_2021&#x2F;gijduzu&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;BitcoinMarkets&#x2F;comments&#x2F;ksvlc3&#x2F;dail...</a>

Here is ThreadReaderApp link for more readable version:<p><a href="https:&#x2F;&#x2F;threadreaderapp.com&#x2F;thread&#x2F;1346133062204198917.html" rel="nofollow">https:&#x2F;&#x2F;threadreaderapp.com&#x2F;thread&#x2F;1346133062204198917.html</a>

One thing the author and I agree on:<p>When Tether falls, it&#x27;s going to make a very big noise.

Here&#x27;s a good write-up about the issues with Tether from a few years ago:<p><a href="https:&#x2F;&#x2F;tonyarcieri.com&#x2F;the-tether-conundrum" rel="nofollow">https:&#x2F;&#x2F;tonyarcieri.com&#x2F;the-tether-conundrum</a>

Why do people still use tether when decentralized stable coins like DAO now exist? Seems super risky to have USDT when you could simply exchange if for DAO and hold that instead.

Surely the only way to keep the valuer of tether stable is to &quot;print&quot; more of it whenever its value starts to increase? Otherwise it wouldn&#x27;t be always worth $1.

Permabears’ final hope is that tether is a scam, because if that fails they have nothing to grasp onto to explain bitcoin’s rise other than legitimate demand.

Even if Tether is a scam, it still seems like the market for Bitcoin scams is infinite, so I&#x27;m not sure how much difference it makes.

Not true since coinbase doesn&#x27;t accept tether. so, how do you explain bitcoin&#x27;s rise on coinbase exchange without tether??

While correlation is not causation, correlation is evidence for causation... and there&#x27;s a lot of correlation in those graphs.

The part I don&#x27;t understand:<p>Say the SEC takes on Tether and it falls. Why then does BTC and the crypto markets crash?

Wait I don&#x27;t get it, it&#x27;s not fully backed but it&#x27;s still backed somewhat right? I thought it was only a chunk of USD that was missing? Or did they completely abandon the usd backing?<p>If it&#x27;s still somewhat backed and just that chunk of usd that remains unaccounted for, printing tether isn&#x27;t exactly a scam? People trade their usd for printed tethers and use that to buy bitcoin, so it&#x27;s still essentially people exchanging usd for bitcoin

Enough with these manipulation controversies. Been hearing this for 3+ years

Anyone know the source of Jacob&#x27;s chart in part 5 of his thread?

can someone explain to me how a district court can sue someone? shouldn&#x27;t this be the SEC or something?

This narrative has been dead for years.

Or perhaps USDT is created as BTC price increases to ensure exchange liquidity of USDT, allowing it to to stay very close to $1

This is a qanon-style conspiracy theory going on for years now. Just follow the money: tethers are freely traded vs USD on multiple markets, including anonymous exchanges. If the conspiracy theory were right, the price of 1 Tether would be less than 1 USD. Meanwhile, it&#x27;s very close to 1.00 USD on all the exchanges.

Can anyone recommend a business bank replacement for Azlo, which is also shutting down?

They just minted another 300,000,000, here are the latest whale mints:<p><a href="https:&#x2F;&#x2F;twitter.com&#x2F;search?q=%22minted%20at%20Tether%20Treasury%22%20%20(from%3Awhale_alert)&amp;src=typed_query&amp;f=live" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;search?q=%22minted%20at%20Tether%20Treas...</a>

Can someone post a real analysis? Are we supposed to believe this guy because he&#x27;s a &quot;Finance Major&quot; with 5k followers and he posted a few graphs??

And meanwhile another 600 million has just been printed by them today. And a few hours later bitcoin price went up. Amazing daily coincidences.

I&#x27;ve said it before and I&#x27;ll say it again:<p>It’s mysterious how Bitcoiners hate the Fed printing money but they get awfully quiet with Tether printing money when it helps prop up the price.

I&#x27;m kinda glad BTC is up, this means I can do an exit with break even or a little profit. I just sold half my crypto assets on the two exchanges I have an account on, I just hope I can have the money transferred out before they become insolvent when the next great crash happens.

While I don’t doubt that Tether was used to manipulate the Bitcoin price upwards, at the same time I believe Bitcoin Futures were&#x2F;are being used to suppress the Bitcoin price as well.<p>———<p>[0]: <a href="https:&#x2F;&#x2F;www.equities.com&#x2F;news&#x2F;how-do-bitcoin-futures-affect-the-price" rel="nofollow">https:&#x2F;&#x2F;www.equities.com&#x2F;news&#x2F;how-do-bitcoin-futures-affect-...</a>

How about USD price manipulation? How much of the USD being created by the FED is back by their reserves?... Is this scam sustainable? What effect would a Fed collapse have on Bitcoin&#x27;s price? I&#x27;m going to wager that the Fed scam has a far larger impact on the USD price of BTC than this article&#x27;s claims on tether fraud or collapse and its not even close.

This is propaganda from a competing altcoin.