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Tether, Blockstream, El Salvador: BTC Worth $23 Without USDT
One of the shadiest moves they recently made was that declaration where they “demonstrated” the backing USDT had.
Well, there were no third-party audits, which is shady by itself, but the way Tether handles this communication just throws kindle to the fires.
You see, since USDT is backed by 74% “cash equivalents” and from those only 2.9% are cash, there isn’t any stability to the stable coin, and the word “stable” is just a word.
The markets know this and as such have begun to increase the rate in which they pose questions… questions Tether feels aren’t proper, of course.
Well, each time the skeptics start questioning, there is always a new Podcast or Medium article supposedly showing some transparency.
Of course these “moves” have one purpose and one purpose alone, which is to give something for the people defending USDT to start fighting on social media calling all of the sensible arguments “Tether FUD”.
The truth is, every good fundamental analyst and crypto veteran knows this “transparency” narrative is just sand on our eyes.
The sad thing is that even people defending USDT know this, but they have too many vested interests.
But here’s the kicker…
…Tether has been caught lying several times, and I do mean downright lying!
When the NYAG investigation was running ink, Tether wrote:
“After an extensive investigation for more than two years and reviewing more than 2.5M documents provided by Tether and Bitfinex, the New York Attorney General’s Office made no negative findings whatsoever that tethers were not fully backed, nor were ever issued without backing.”
This is downright lying and, again, Tether trying to floodlight us. In truth, this was what happened, and I quote the investigation’s conclusion:
“Because of Tether’s inability to conduct significant banking activity during this time, it could not itself hold dollars sufficient to back the hundreds of millions of new tethers that had entered the market. Until September 15, 2017, the only U.S. dollars held by Tether ostensibly backing the approximately 442 million tethers in circulation was the approximately $61 million on deposit at the Bank of Montreal.
As of November 2, 2018, tethers were again no longer backed 1-to-1 by U.S. dollars in a Tether bank account, because a substantial portion of the backing… had been transferred to Bitfinex to make up for the funds taken by Crypto Capital.”
These moves set a precedent which I like to call Goal-Post Moving.
The more Tether prints, the more time it is allowed to expand, the more crypto projects, tokens, and blockchains it infests, the more entities, systems, exchanges, tokens, and so on will it bring down in its inevitable demise.
USDT is constantly pumping BTC for example, as I wrote about already countless times, and experts, crypto skeptics, and so on keep on banging the key that “BTC would trade in low teens if not for USDT”… and they are right!
The tokens immune to this are crypto not pumped by Tether, BCH being one of them.
CoinGeek also writes quite a bit about USDT, and here’s what they write on this particular topic:
"Following periods of negative returns, Tether flows from Bitfinex to Poloniex and Bittrex, and in exchange, Bitcoin is sent back to Bitfinex… When there are positive net hourly flows from Bitfinex to Poloniex and Bittrex, Bitcoin prices move up over the next three hours, resulting in predictably high Bitcoin returns. The price impact is present after periods of negative returns and periods following the printing of Tether, that is, when there is likely an oversupply of Tether in the system.”
“This phenomenon strongly suggests that the price effect is driven by Tether issuances. Additionally, the price impact is strongly linked to trading of the one large player and not to other accounts on Poloniex, Bittrex, or other Tether exchanges.”
If you have been reading my blog posts, you know I’m always writing about this and on how dependant on this printing machine BTC is.
On the other hand, the crash coming from Tether’s flames will be catastrofic, it will be a bear market that will remind us all of the destruction of the black death – or even worse!
Exchanges collapse, taking the majority of people with them. Poloniex, Bittrex, Binance, Bitfinex, FTX, BSC, and so on… all in shambles.
By reading a recent study on the Journal of Finance you can even see USDT is being minted to purchase BTC for ages now, and that USDT has more trading volume than XRP, ETH, and BTC… COMBINED!
Of course, BTC would be traded in the low teens if it wasn’t for the printer going BRRR…
I shudder to think about this time-bomb going off, and when it happens… the whole of crypto, and yes it will affect everyone, will have a HUGE liquidity problem.
Nobody will like it, not even I, though I know it will happen and it SHOULD HAVE HAPPENED ALREADY.
It’s our fault this has gone too far, and we aren’t doing ourselves any favors delaying the inevitable.
Just the other day, Tether was supposed to flip $3 Billion TRON to ETH.
They added the $3 Billion to ETH and only revoked $2 Billion to TRON… the net result was that $1 Billion in USDT entered circulation… am I supposed to think they added $1 Billion in assets?
This is crazy!
But do you know why Tether does these things?
Because it is feeding a lot of very influential players, and it knows these players will all flock to its defense.
Two of the pocketed individuals are Mow and Beck, Blockstream executives… surprisingly, Tether is a Blockstream Seed investor, one of the 4.