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Given their lack of audits/transparency coupled with a Tether supply increase from 4 billion to 20 billion this year alone, I would by inclined to apply Occam’s

Given their lack of audits/transparency coupled with a Tether supply increase from 4 billion to 20 billion this year alone, I would by inclined to apply Occam’s Razor and view this as primarily market manipulation driven by Tether’s free money printer.

DSingularity 6y ago
I don’t think you are using Occams Razor correctly.
- ceejayoz 6y ago
  What's the simpler explanation than "fraud" where Tether is concerned? They still haven't passed an audit, and they've changed the "1USDT is backed by $1" to "1USDT is backed by loans and vaguely defined investments". https://cointelegraph.com/news/changes-to-tethers-terms-of-reserves-raises-fresh-concerns https://cointelegraph.com/news/changes-to-tethers-terms-of-r...
bouncycastle 6y ago
A major chunk of Tether lives on Ethereum and is mostly being used for on-chain decentralized money-markets using smart contracts. (Eg Unisawp, MakerDAO, CurveFi and Compound) You can track the Tether issued on Ethereum in real-time by looking at this contract https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c13d831ec7 https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c... Currently over $12.4 billion Tether issued on Ethereum
- ur-whale 6y ago
  Thanks for the link, but is that the only place Tether "lives"? Last I read up on it, it was implemented on top of Omni [1] [1] https://hackernoon.com/a-closer-look-at-tethers-blockchain-5c3032328e52 https://hackernoon.com/a-closer-look-at-tethers-blockchain-5... Are there multiple Blockchains where Tether was issued?
  - bouncycastle 6y ago
    Tether is issued on multiple blockchains. Omni is Bitcoin based, and recently most of it moved from Omni to Ethereum ($12.6 bil). Others include Tron ($6.4 bil), EOS ($90 mil), Liquid ($16.5 mil), and so on. Full stats https://wallet.tether.to/transparency https://wallet.tether.to/transparency
ur-whale 6y ago
Yes, this has been discussed many times on HN, but I'd like to hear the specifics of the mechanism by which Tether actually influences the price of Bitcoin up and down. According to [1] (2018) , actually getting down to the metal to track what happens in the tether blockchain isn't straightforward. According to coincap [2] there is around 20B tether in circulation. Also according to coincap, the Bitcoin market cap is around 380B. Now, the question is one of market depth: can 20B be used to manipulate a 380B market. What I would very much like to see is an aggregate market depth number for - say - the top 30 exchanges. Does anyone have a reference for this? [1] https://hackernoon.com/a-closer-look-at-tethers-blockchain-5c3032328e52 https://hackernoon.com/a-closer-look-at-tethers-blockchain-5... [2] https://coincap.io/ https://coincap.io/
- meowster 6y ago
  That's 20B of "money" supposedly going into the market. A market cap of 380B doesn't mean 380B went into the market. 20B of "money" could easily move such a market significantly. If I have a billion coins, and I sell one for $1, it has a market cap of 1B, but only $1 went into the market.
  - ur-whale 6y ago
    Yes, which is the reason for my question (last line of my post).
- paulgb 6y ago
  > Now, the question is one of market depth: can 20B be used to manipulate a 380B market. I think the answer to this is yes, but I’d suggest a further specification: could it be used to manipulate a 380B market without breaking the dollar peg, which I haven’t been able to figure out a good mechanism for. That said, I do think there’s a reasonably probable case where USDT unraveling is an existential threat to BTC: if a large portion of USDT reserves are actually in BTC, a run on USDT could cause Tether to start needing to sell BTC holdings at market to hold the peg, which would drive the prices down. AFAIK Tether has not said that it is backed by USD, just by “assets”, and hasn’t completed an audit.

DSingularity 6y ago

I don’t think you are using Occams Razor correctly.

ceejayoz 6y ago
What's the simpler explanation than "fraud" where Tether is concerned? They still haven't passed an audit, and they've changed the "1USDT is backed by $1" to "1USDT is backed by loans and vaguely defined investments". https://cointelegraph.com/news/changes-to-tethers-terms-of-reserves-raises-fresh-concerns https://cointelegraph.com/news/changes-to-tethers-terms-of-r...

bouncycastle 6y ago

A major chunk of Tether lives on Ethereum and is mostly being used for on-chain decentralized money-markets using smart contracts. (Eg Unisawp, MakerDAO, CurveFi and Compound) You can track the Tether issued on Ethereum in real-time by looking at this contract https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c13d831ec7 https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c... Currently over $12.4 billion Tether issued on Ethereum

ur-whale 6y ago
Thanks for the link, but is that the only place Tether "lives"? Last I read up on it, it was implemented on top of Omni [1] [1] https://hackernoon.com/a-closer-look-at-tethers-blockchain-5c3032328e52 https://hackernoon.com/a-closer-look-at-tethers-blockchain-5... Are there multiple Blockchains where Tether was issued?
- bouncycastle 6y ago
  Tether is issued on multiple blockchains. Omni is Bitcoin based, and recently most of it moved from Omni to Ethereum ($12.6 bil). Others include Tron ($6.4 bil), EOS ($90 mil), Liquid ($16.5 mil), and so on. Full stats https://wallet.tether.to/transparency https://wallet.tether.to/transparency

ur-whale 6y ago

Yes, this has been discussed many times on HN, but I'd like to hear the specifics of the mechanism by which Tether actually influences the price of Bitcoin up and down. According to [1] (2018) , actually getting down to the metal to track what happens in the tether blockchain isn't straightforward. According to coincap [2] there is around 20B tether in circulation. Also according to coincap, the Bitcoin market cap is around 380B. Now, the question is one of market depth: can 20B be used to manipulate a 380B market. What I would very much like to see is an aggregate market depth number for - say - the top 30 exchanges. Does anyone have a reference for this? [1] https://hackernoon.com/a-closer-look-at-tethers-blockchain-5c3032328e52 https://hackernoon.com/a-closer-look-at-tethers-blockchain-5... [2] https://coincap.io/ https://coincap.io/

meowster 6y ago
That's 20B of "money" supposedly going into the market. A market cap of 380B doesn't mean 380B went into the market. 20B of "money" could easily move such a market significantly. If I have a billion coins, and I sell one for $1, it has a market cap of 1B, but only $1 went into the market.
- ur-whale 6y ago
  Yes, which is the reason for my question (last line of my post).
paulgb 6y ago
> Now, the question is one of market depth: can 20B be used to manipulate a 380B market. I think the answer to this is yes, but I’d suggest a further specification: could it be used to manipulate a 380B market without breaking the dollar peg, which I haven’t been able to figure out a good mechanism for. That said, I do think there’s a reasonably probable case where USDT unraveling is an existential threat to BTC: if a large portion of USDT reserves are actually in BTC, a run on USDT could cause Tether to start needing to sell BTC holdings at market to hold the peg, which would drive the prices down. AFAIK Tether has not said that it is backed by USD, just by “assets”, and hasn’t completed an audit.