Tether is a menace for the crypto market. I've read about the so called reserves and it is easy to find that these are mostly crypto reserves, or just printed without any reserves at all.
Maybe they even have Tether for reserves. It makes no sense and makes the market very vulnerable. Withdrawals from exchanges can soon be in trouble as many are mostly filled with Tether and exchanges will have to enter a debt phase lending money from banks to survive.
The whole crypto market was once again pumping on helium. A two trillion dollar bubble that burst like that and now it will keep falling in the endless pit of the bear market.
Read my previous articles if you still haven't and you wil see how precisely I predicte the market downturn, the bounce and the entry in the bear market.
All the signs were there and those that were caught in a state of eurphoria of course can't see what is going on. Now people are losing money as they bought at 65k and some have already commited suicide for making huge mistakes to trade with all their money and money of their clients.
Some of us were always warning, although there are some pricks on Twitter, those fucktards that don't give a shit about your wellbeing that are just pushing others into bad decisions.
Even if you lost all your money, this is no reason to harm yourself. You are more valuable than any money, so please forget about it. One failure doesn't mean that your life is over. There is a lot more to live for. Think of everythig else you are missing in a moment of weakness. This is seriouly no reason to feel bad.
It's just money bro, you will make them back.
Back to Tether though. Recently there was a report coming from Tether. A pie-chart in compliance with an order coming from the New York Attorney General.
Tether was supposed to give concrete evidence of its reserves.
However, tether gave this instead:
USDT is only covered in cash by a 3,78% ratio. The worst part is that 65% seems to be covered by something called "commercial paper", without analyzing it further. This basically could mean anything, as from Investopedia the definition means:
Commercial paper is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities.
https://www.investopedia.com/terms/c/commercialpaper.asp
To make this simpler, Commercial Paper is debt. Tether sold these commercial papers to another financial entity or corporation and received cash for this. This is absolutely legal and in no way something to accuse Tether for.
But, as usual with Tether, there is a catch.
While Tether explains that all other types of loans are not assiciated with the parent company "Bitfinex", it doesn't say the same for the "Commercial Paper" issued.
There are also unconfirmed rumours that Tether is backed by loans of USDT, and this begins by selling massive amounts of USDT to exchanges on a discount while accounting this discount as a loan and reserves.
Now Tether has made up a lot of creative accounting in this report and nothing will go well for it. It is already accused of blocking any independent audit and just that made it one of the most shady companies working in the cryptocurrency industry.
The top exchanges like Binance that support Tether are also going to be in trouble. The moment USDT fails, there will be a Binance exchange failing and possibly some more that are heavily depending on USDT instead of cash.
Binance has lowered fiat currency reserves all this time and now that deposits are limited an event similar to MtGox is very possible. I will be waiting for a repeat of history.
