3 ms·

>85% of all trading volume is ersatz counterfeit dollars. [2] It really is an open question just how big this market actually is. If it wasn't there would be a

>85% of all trading volume is ersatz counterfeit dollars. [2] It really is an open question just how big this market actually is. If it wasn't there would be a Bitcoin ETF. This is in fact the reason there isn't one. Can you explain this? I'm interested in what you mean.

arcticbull 5y ago
USDT is a fascinating story that I can't do justice in a quick post. The overwhelming majority of crypto trading isn't carried out against fiat currency but against a Stablecoin called Tether [1]. They settled recently with the NYAG, and lost access to doing business in New York at all a few months ago. The AG says: > “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system." The PDF is worth a read, pretty riveting stuff [3]. At various times they were completely unbacked by anything. All their executives aparently received target letters from the DOJ as the subjects of a grand jury investigation re: bank fraud, and since printed up another $3B USDT. Rumor has it they only have 2 actual customers: Cumberland/DRW and Alameda/FTX. As for the ETF connection, an ETF hoping to list disclosed that 95% of all crypto trading volume was fictional in 2019 [4]. More about USDT here: [older, 5, newer, 6]. Including a great episode of This Week in Startups by Calacanis. [7] [1] tether.to [2] https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... [3] 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... [4] https://www.technologyreview.com/2019/03/26/1206/nearly-all-bitcoin-trades-are-fake-apparently/ https://www.technologyreview.com/2019/03/26/1206/nearly-all-... [5] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ [6] https://bennettftomlin.com/2021/06/21/a-non-exhaustive-list-of-bitfinex-and-tethers-misdeeds-and-red-flags/#more-3063 https://bennettftomlin.com/2021/06/21/a-non-exhaustive-list-... [7] https://thisweekinstartups.com/biden-targets-big-corporations-tether-investigation-with-bitfinexed-e1243/ https://thisweekinstartups.com/biden-targets-big-corporation...
- phatfish 5y ago
  The way I see it the entire Crypto space is not valued in USD but USDT. And who knows what USDT is really worth? Some lucky people will manage to cash out to USD, but current valuations will crash.

arcticbull 5y ago

USDT is a fascinating story that I can't do justice in a quick post. The overwhelming majority of crypto trading isn't carried out against fiat currency but against a Stablecoin called Tether [1]. They settled recently with the NYAG, and lost access to doing business in New York at all a few months ago. The AG says: > “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system." The PDF is worth a read, pretty riveting stuff [3]. At various times they were completely unbacked by anything. All their executives aparently received target letters from the DOJ as the subjects of a grand jury investigation re: bank fraud, and since printed up another $3B USDT. Rumor has it they only have 2 actual customers: Cumberland/DRW and Alameda/FTX. As for the ETF connection, an ETF hoping to list disclosed that 95% of all crypto trading volume was fictional in 2019 [4]. More about USDT here: [older, 5, newer, 6]. Including a great episode of This Week in Startups by Calacanis. [7] [1] tether.to [2] https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... [3] 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... [4] https://www.technologyreview.com/2019/03/26/1206/nearly-all-bitcoin-trades-are-fake-apparently/ https://www.technologyreview.com/2019/03/26/1206/nearly-all-... [5] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ [6] https://bennettftomlin.com/2021/06/21/a-non-exhaustive-list-of-bitfinex-and-tethers-misdeeds-and-red-flags/#more-3063 https://bennettftomlin.com/2021/06/21/a-non-exhaustive-list-... [7] https://thisweekinstartups.com/biden-targets-big-corporations-tether-investigation-with-bitfinexed-e1243/ https://thisweekinstartups.com/biden-targets-big-corporation...

phatfish 5y ago
The way I see it the entire Crypto space is not valued in USD but USDT. And who knows what USDT is really worth? Some lucky people will manage to cash out to USD, but current valuations will crash.