4 ms·

I’ll concede that if you are certain Bitcoin or Tether is a fraud that will likely blow up at any time, then no you shouldn’t put any allocation into Bitcoin.

by lowkey 5y ago

I’ll concede that if you are certain Bitcoin or Tether is a fraud that will likely blow up at any time, then no you shouldn’t put any allocation into Bitcoin. I obviously don’t agree with your assessment but I am intellectually curious enough to want to understand where this conviction comes from. Edited: to add Tether fraud risk, as I misinterpreted OPs comment to be about Bitcoin when it was actually about Tether.

arcticbull 5y ago
I don't think Bitcoin is a fraud, after all 1BTC=1BTC. However, its price in USD is largely fictitious. 95% of all Bitcoin trading volume is fake according to Bitwise. [1] Trading BTC is almost exclusively conducted not against USD but against USDT, on the order of 80%. [2] Tether is by their own admission (or I should say pie chart) 3% backed by USD. [3] That 65% "commercial paper" would make them the second largest global holder of commercial paper after JP Morgan, but nobody on Wall Street has heard of them. By their own terms of service, they never have to redeem a single one for USD, on any timeline - not for you, not for anyone else - and even if they chose to out of good will, they could redeem it for any "backing" they so choose. [4] Tether is, by and large, a fraudulent enterprise. [5] So, my conviction is based on the idea that if $60B worth of dollars (not market cap, dollars) and 80% of trading volume against BTC is these chuck-e-cheese tokens - and they were to suddenly disintegrate, that yes, the market price would utterly collapse. There are no good players in this space. Even Coinbase, widely regarded as the "best" of the exchanges, had to settle with the CFTC because at one point they allowed 99% of the entire Litecoin trading pair (globally) to exist as wash trading between two bots at Coinbase HQ. [6] That's the best of the best. tl;dr: The market is overwhelmingly manipulated, wash traded, spoofed, and trading is conducted in a currency that's backed by chewing gum and baling twine. [1] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-of-bitcoin-trade-volume-is-fake-real-market-is-or https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o... [2] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin [3] https://davidgerard.co.uk/blockchain/2021/05/13/tether-publishes-two-pie-charts-of-its-reserves/ https://davidgerard.co.uk/blockchain/2021/05/13/tether-publi... [4] https://tether.to/legal/ https://tether.to/legal/ section (3) [5] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... [6] https://www.cftc.gov/PressRoom/PressReleases/8369-21 https://www.cftc.gov/PressRoom/PressReleases/8369-21
- lowkey 5y ago
  I see your point and have edited my previous comment to reflect that it is Tether fraud risk that was your concern, not Bitcoin per se. I thank you for the links. I will look into them further.
  - arcticbull 5y ago
    btw, I think it's important to say I could be totally wrong on what - if any - impact this would have on the price in the future. I'm speculating; this is my thesis for not investing, but everyone has to of course make up their own minds.

by lowkey 5y ago

arcticbull 5y ago

I don't think Bitcoin is a fraud, after all 1BTC=1BTC. However, its price in USD is largely fictitious. 95% of all Bitcoin trading volume is fake according to Bitwise. [1] Trading BTC is almost exclusively conducted not against USD but against USDT, on the order of 80%. [2] Tether is by their own admission (or I should say pie chart) 3% backed by USD. [3] That 65% "commercial paper" would make them the second largest global holder of commercial paper after JP Morgan, but nobody on Wall Street has heard of them. By their own terms of service, they never have to redeem a single one for USD, on any timeline - not for you, not for anyone else - and even if they chose to out of good will, they could redeem it for any "backing" they so choose. [4] Tether is, by and large, a fraudulent enterprise. [5] So, my conviction is based on the idea that if $60B worth of dollars (not market cap, dollars) and 80% of trading volume against BTC is these chuck-e-cheese tokens - and they were to suddenly disintegrate, that yes, the market price would utterly collapse. There are no good players in this space. Even Coinbase, widely regarded as the "best" of the exchanges, had to settle with the CFTC because at one point they allowed 99% of the entire Litecoin trading pair (globally) to exist as wash trading between two bots at Coinbase HQ. [6] That's the best of the best. tl;dr: The market is overwhelmingly manipulated, wash traded, spoofed, and trading is conducted in a currency that's backed by chewing gum and baling twine. [1] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-of-bitcoin-trade-volume-is-fake-real-market-is-or https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o... [2] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin [3] https://davidgerard.co.uk/blockchain/2021/05/13/tether-publishes-two-pie-charts-of-its-reserves/ https://davidgerard.co.uk/blockchain/2021/05/13/tether-publi... [4] https://tether.to/legal/ https://tether.to/legal/ section (3) [5] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... [6] https://www.cftc.gov/PressRoom/PressReleases/8369-21 https://www.cftc.gov/PressRoom/PressReleases/8369-21

lowkey 5y ago
I see your point and have edited my previous comment to reflect that it is Tether fraud risk that was your concern, not Bitcoin per se. I thank you for the links. I will look into them further.
- arcticbull 5y ago
  btw, I think it's important to say I could be totally wrong on what - if any - impact this would have on the price in the future. I'm speculating; this is my thesis for not investing, but everyone has to of course make up their own minds.