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I'm having a hard time wrapping my head around how squeezing Tether or Bitcoin would work in this case. Could you please explain?
by cocothp 6y ago
I'm having a hard time wrapping my head around how squeezing Tether or Bitcoin would work in this case. Could you please explain?
- gomox 6y agoSay you think Tether USD (USDT) is worthless and is being printed willy nilly to prop up the price of Bitcoin. As a corollary, you are basically forced to assume that large exchange owners are aware of this fact because quite simply there is no other way for fraud to happen at such a large scale without their knowledge, since exchanges KYC their customers and are aware of their balances and trade volumes. So you find an exchange that will allow you to short the BTC/USD (not USDT) pair and take a position. The liquidation price of your short is known to the exchange operators. If your position is large enough to create a problem for the whole scheme, the exchange owners can inform the Tether printers of your liquidation price, which they can use to squeeze you out, because they know exactly how high the price has to be to trigger your margin call.