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You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you

You would have to be nuts to short when there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will. If you want to short cryptocurrency, short tethers.

mancerayder 9y ago
How would one do that technically? The value doesn't fluctuate. How would you time when tether goes to 0? If it ever goes to 0, that is.
tome 9y ago
> there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?
- gthtjtkt 9y ago
  The token is called "Tether" and it's run by the Bitfinex exchange. It's supposed to be backed by US dollars, but they've refused to release any third-party audits to support that statement and it says this on their website: "There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers." So, basically, it's Monopoly money. Bloomberg recently did a story on it: https://www.bloomberg.com/amp/news/articles/2017-12-05/mystery-shrouds-tether-and-its-links-to-biggest-bitcoin-exchange https://www.bloomberg.com/amp/news/articles/2017-12-05/myste...
  - klipt 9y ago
    And the market cap is over a billion! I wish I could print a billion in monopoly money and exchange it 1:1 for real dollars... https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
    - tome 9y ago
      Ah, so we're into fractional reserve territory. Never mind, I hear there are cryptocurrencies that will save us from that.
      - klipt 9y ago
        Of course, there's SeriouslyGuysUseThisLimitedCoinOnlyNoOtherCoinsCoin.
    - jcoffland 9y ago
      That is not how market caps work. No one can exchange all the Tethers for the market cap in USD.
      - klipt 9y ago
        No, I'm saying the market cap is the number of tethers that tether.to has printed so far.
      - ufo 9y ago
        To be fair, no one can exchange Tethers for any amount of USD. Bitfinex and all other Tether-using exchanges only allow people to cash out with Bitcoins. (Instead of the weakness of tethers being reflected in lower prices, it is reflected by inflated the tether-denominated prices for Bitcoin inside Bitfinex)
bufferoverflow 9y ago
I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?
- EthanHeilman 9y ago
  >why not just hold the real dollars? Some exchanges don't accept fiat, so if you want to trade USD/BTC you settle for USDT/BTC.
  - paulgb 9y ago
    Do you know if any of these exchanges are part of the index CME uses?
    - thisisit 9y ago
      Out of the constituent exchanges only Kraken has USDT markets. Though I am not sure if they have difficulties in cashing out USD or not.
- Scott_Sanderson 9y ago
  No one is buying those tethers. Bitfinex is printing them and using them on their own exchange's margin trading market. They use it to wash trade the price up or down as desired. There is some evidence they have been wash trading down to trigger stop loss sell orders and buying the cheap coins. Then they wash trade up and sell.
  - jcoffland 9y ago
    This is pure speculation.
    - coralreef 9y ago
      The relationship between Bitfinex and Tether is real though, executives have positions and board seats in both companies.
zone411 9y ago
Sorry, but what? What exchange is printing billions of $ of unbacked Bitcoins?
- askafriend 9y ago
  He's right. It's Bitfinex and it's been going on for a while now. A ton of people have called them out and they've largely ignored everyone. They've promised an audit and no audit has materialized in the years since they've promised one. There's a fantastic anonymous twitter account that's been calling them out for months now and gathering pretty damning evidence: https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed
  - zone411 9y ago
    Bitfinex prints Tethers, not Bitcoins.
    - JumpCrisscross 9y ago
      > Bitfinex prints Tethers, not Bitcoins "Yeah, but he's our bastard" [1]! Joking aside, you deposit a coin with Bitfinex and get some pixels saying "one Bitcoin". You then trust those pixels can be exchanged for Bitcoins or dollars down the road. If they're playing fast and loose with one, it's a funny argument to make that they aren't doing the same with the other. [1] https://en.wikiquote.org/wiki/Talk:Franklin_D._Roosevelt https://en.wikiquote.org/wiki/Talk:Franklin_D._Roosevelt
    - askafriend 9y ago
      They make claims that Tether are 1:1 redeemable with USD.
- empath75 9y ago
  I didn't say they were.
  - zone411 9y ago
BLanen 9y ago
Don't short tethers. The margin rates might just eat your gains from it going to 0.
abrkn 9y ago
It's $1.15b[1] and most likely to be the result of incoming USD wires. The Tether USD in circulation accounts for 0.36%[2] of the Bitcoin (BTC) market cap. - [1] http://omniexplorer.info/ask.aspx?api=getpropertytotaltokens&prop=31 http://omniexplorer.info/ask.aspx?api=getpropertytotaltokens... - [2] https://coinmarketcap.com/ https://coinmarketcap.com/

mancerayder 9y ago

How would one do that technically? The value doesn't fluctuate. How would you time when tether goes to 0? If it ever goes to 0, that is.

tome 9y ago

> there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?

gthtjtkt 9y ago
The token is called "Tether" and it's run by the Bitfinex exchange. It's supposed to be backed by US dollars, but they've refused to release any third-party audits to support that statement and it says this on their website: "There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers." So, basically, it's Monopoly money. Bloomberg recently did a story on it: https://www.bloomberg.com/amp/news/articles/2017-12-05/mystery-shrouds-tether-and-its-links-to-biggest-bitcoin-exchange https://www.bloomberg.com/amp/news/articles/2017-12-05/myste...
- klipt 9y ago
  And the market cap is over a billion! I wish I could print a billion in monopoly money and exchange it 1:1 for real dollars... https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
  - tome 9y ago
    Ah, so we're into fractional reserve territory. Never mind, I hear there are cryptocurrencies that will save us from that.
    - klipt 9y ago
      Of course, there's SeriouslyGuysUseThisLimitedCoinOnlyNoOtherCoinsCoin.
  - jcoffland 9y ago
    That is not how market caps work. No one can exchange all the Tethers for the market cap in USD.
    - klipt 9y ago
      No, I'm saying the market cap is the number of tethers that tether.to has printed so far.
    - ufo 9y ago
      To be fair, no one can exchange Tethers for any amount of USD. Bitfinex and all other Tether-using exchanges only allow people to cash out with Bitcoins. (Instead of the weakness of tethers being reflected in lower prices, it is reflected by inflated the tether-denominated prices for Bitcoin inside Bitfinex)

bufferoverflow 9y ago

I'm consistently confused as to who is buying all the tethers in such crazy amounts. It's not like they are appreciating in value. They are sort-of pegged to the dollar, but why not just hold the real dollars?

EthanHeilman 9y ago
>why not just hold the real dollars? Some exchanges don't accept fiat, so if you want to trade USD/BTC you settle for USDT/BTC.
- paulgb 9y ago
  Do you know if any of these exchanges are part of the index CME uses?
  - thisisit 9y ago
    Out of the constituent exchanges only Kraken has USDT markets. Though I am not sure if they have difficulties in cashing out USD or not.
Scott_Sanderson 9y ago
No one is buying those tethers. Bitfinex is printing them and using them on their own exchange's margin trading market. They use it to wash trade the price up or down as desired. There is some evidence they have been wash trading down to trigger stop loss sell orders and buying the cheap coins. Then they wash trade up and sell.
- jcoffland 9y ago
  This is pure speculation.
  - coralreef 9y ago
    The relationship between Bitfinex and Tether is real though, executives have positions and board seats in both companies.

zone411 9y ago

Sorry, but what? What exchange is printing billions of $ of unbacked Bitcoins?

askafriend 9y ago
He's right. It's Bitfinex and it's been going on for a while now. A ton of people have called them out and they've largely ignored everyone. They've promised an audit and no audit has materialized in the years since they've promised one. There's a fantastic anonymous twitter account that's been calling them out for months now and gathering pretty damning evidence: https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed
- zone411 9y ago
  Bitfinex prints Tethers, not Bitcoins.
  - JumpCrisscross 9y ago
    > Bitfinex prints Tethers, not Bitcoins "Yeah, but he's our bastard" [1]! Joking aside, you deposit a coin with Bitfinex and get some pixels saying "one Bitcoin". You then trust those pixels can be exchanged for Bitcoins or dollars down the road. If they're playing fast and loose with one, it's a funny argument to make that they aren't doing the same with the other. [1] https://en.wikiquote.org/wiki/Talk:Franklin_D._Roosevelt https://en.wikiquote.org/wiki/Talk:Franklin_D._Roosevelt
  - askafriend 9y ago
    They make claims that Tether are 1:1 redeemable with USD.
empath75 9y ago
I didn't say they were.
- zone411 9y ago

BLanen 9y ago

Don't short tethers. The margin rates might just eat your gains from it going to 0.

abrkn 9y ago

It's $1.15b[1] and most likely to be the result of incoming USD wires. The Tether USD in circulation accounts for 0.36%[2] of the Bitcoin (BTC) market cap. - [1] http://omniexplorer.info/ask.aspx?api=getpropertytotaltokens&prop=31 http://omniexplorer.info/ask.aspx?api=getpropertytotaltokens... - [2] https://coinmarketcap.com/ https://coinmarketcap.com/