4 ms·

By trading tether issued out of thin air for BTC.

• deleted 9y ago
  [deleted]
• RexetBlell 9y ago
  Why would anyone want to exchange their Bitcoins that are worth over $10,000 each on Coinbase (and can be converted to real dollars) for some tokens that are backed by nothing?
  • cantrip 9y ago
    Tether are, ostensibly, backed by $1 in a bank somewhere. Having a dollar token is very useful, since you can move in and out of crypto trading positions into a stable store of value, good old USD. Converting to real money takes a long time so you can't react to the market, and is also taxable and often has other fees on top.
    • michaelchisari 9y ago
      > backed by $1 in a bank somewhere. Are we sure about this?
      • runeks 9y ago
        No, that’s the point, no one is sure about this. For a token that’s supposed to be redeemable in USD, the tether is extremely opaque.
      • cantrip 9y ago
        Yeah you took out the word ostensibly when you quoted me.
    • tehlike 9y ago
      Converting to another coin is also taxable. Similar to selling a stock.
  • Zpalmtree 9y ago
    Good place to park your gains when the market's volatile.
  • corysama 9y ago
    It’s used to move large amounts of dollars between exchanges that don’t want to deal with the regulations involved in moving large amounts of dollars.
  • runeks 9y ago
    In my experience, no one has a satisfying explanation for this. Nor why this would affect the USD price of bitcoin.
    • tehlike 9y ago
      Bitfinex can become insolvent, which means people cannot cashout their usdt's. Prices may crash.
    • tehlike 9y ago
      Also you can trade among yourself and create the illusion of hot market, suck a lot of people in, and use the funds from these people to stay afloat.