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Weaver's claim about Tether being a vehicle to inflate the price of Bitcoin is odd. The main Tether-BTC transacting I'm aware of is in high frequency trading.

Weaver's claim about Tether being a vehicle to inflate the price of Bitcoin is odd. The main Tether-BTC transacting I'm aware of is in high frequency trading. Any longterm position in Tether is effectively against BTC (electing to instead hold a tokenized USD). Furthermore, Tether has a market cap only 1/16 of BTC. You can say either are flawed individually, but their valuations are independent. China also has a geopolitical incentive to promote crypto and counter the USD's current status as the reserve currency. The capability for the US to inject USD into itself while retaining a worldwide demand is undoubtedly at the forefront of China's mind.

jayd16 6y ago
>but their valuations are independent. The key complaint is that they are, in fact, NOT independent. You can use one to manipulate the other under the guise of being backed by USD when in reality its backed by loans backed by BTC (or some other permutation).
throwaway6734 6y ago
one theory I've seen on tether inflation involves loaning tether via margin to people to buy bitcoin, which then pushes up the price of bitcoin, which then allows the tether loaner (that also holds bitcoin) to loan more tether as it's now backed by more valuable assets
pestatije 6y ago
No, what they are all saying is that issuers of Tether tokens are buying bitcoins with their proceeds. They so know because of bitcoin's stupendous price rise. And as the reasoning behind it they are pointing to Tether issuers' imminent facing of regulatory and criminal scrutiny.
ur-whale 6y ago
>Tether being a vehicle to inflate the price of Bitcoin is odd I'm not so sure. I'm a great supporter of Bitcoin, but: a) Tether worries me a great deal, especially if you dig into the background of the folks behind it. Unless tether lets itself be properly audited and proves cash reserves, it can indeed, in a rater straightforward manner, be used to manipulate BTCUSD b) The current price action also worries me a great deal: it's IMO likely going to go through more 2018-like volatility events (i.e. a x5 haircut to shed speculators) through 2021 thereby lending temporary credibility to the nocoiners arguments. I'd much prefer to see Bitcoin price be either stable in value or growing slowly. But the nature of the beast makes that proposition a difficult one until it reaches its "natural" capitalization (whatever that may be - some say that of gold).

jayd16 6y ago

>but their valuations are independent. The key complaint is that they are, in fact, NOT independent. You can use one to manipulate the other under the guise of being backed by USD when in reality its backed by loans backed by BTC (or some other permutation).

throwaway6734 6y ago

one theory I've seen on tether inflation involves loaning tether via margin to people to buy bitcoin, which then pushes up the price of bitcoin, which then allows the tether loaner (that also holds bitcoin) to loan more tether as it's now backed by more valuable assets

pestatije 6y ago

No, what they are all saying is that issuers of Tether tokens are buying bitcoins with their proceeds. They so know because of bitcoin's stupendous price rise. And as the reasoning behind it they are pointing to Tether issuers' imminent facing of regulatory and criminal scrutiny.

ur-whale 6y ago

>Tether being a vehicle to inflate the price of Bitcoin is odd I'm not so sure. I'm a great supporter of Bitcoin, but: a) Tether worries me a great deal, especially if you dig into the background of the folks behind it. Unless tether lets itself be properly audited and proves cash reserves, it can indeed, in a rater straightforward manner, be used to manipulate BTCUSD b) The current price action also worries me a great deal: it's IMO likely going to go through more 2018-like volatility events (i.e. a x5 haircut to shed speculators) through 2021 thereby lending temporary credibility to the nocoiners arguments. I'd much prefer to see Bitcoin price be either stable in value or growing slowly. But the nature of the beast makes that proposition a difficult one until it reaches its "natural" capitalization (whatever that may be - some say that of gold).