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Even if they do lose, it will not have a material effect on the price of btc (apart from a potential short-term wick)
by martinko 6y ago
Even if they do lose, it will not have a material effect on the price of btc (apart from a potential short-term wick)
- raesene9 6y agoThat's an interesting view, what makes you say that? Tether's market cap is about $10b now and it's daily transaction volume regularly exceeds that of BTC. It would seem likely that if that volume left the market it would have a significant impact on the cost of other coins, especially if they are not 1:1 backed.
- martinko 6y agoTether is just a vehicle for transferring offshore USD between third parties. It does not underpin the value of bitcoin, it is more of a parallel system to bitcoin for transferring USD.
- raesene9 6y agoyou're assuming that Tether is not just printing Tether's out of nothing of course :) As they have never had an audit and have already admitted to not being 1:1 backed, that's not necessarily an assumption that'll play out well.
- martinko 6y agoEven if they are (having spoken to the cfo and ceo personally, i dont hink they are), this affects tether holders, not btc holders.
- raesene9 6y agoerr it's been publicly admitted by Tether in documentation submitted to the NY courts hearing their case against the NYAG that they're not 1:1 backed. From https://bitcoinmagazine.com/articles/holders-are-not-at-risk-bitfinex-lawyer-responds-to-ny-attorney-general https://bitcoinmagazine.com/articles/holders-are-not-at-risk... "Hoegner admits that Tether is operating under a roughly 74 percent reserve"
- martinko 6y agoThats two different things. They are backed by loans to bitfinex, like your money in the bank is backed by mortgages etc. I am not defending this, I think it is a major fuck up (one of many by bitfinex), but again, I do not think they are insolvent and that they will not be able to cover tether liabilities.