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Perhaps this was the final takedown necessary to pave the way for BTC ETF approval.
by fhinson 3y ago
Perhaps this was the final takedown necessary to pave the way for BTC ETF approval.
- janmo 3y agoNot before Tether has been taken down
- roland35 3y agoyup Tether is the biggest fake money printing machine that keeps BTC afloat
- TacticalCoder 3y agoI think so too however it looks like they may have printed their (counterfeited) way into solvency. Basically: buy cheap BTCs, print shitload of tethers, sell BTCs for real USD to the tune of tens of billions and now store these real USD in short term US treasuries (they don't own chinese treasuries anymore) bringing in 5% and more. They're claiming they now have excess money (!) to back their tether due to the fact that they collect 5% or more of interest on the short-term treasuries they have. Put it this way: even if they printed $40bn out of their arses out of $80bn of tether, the $40bn of actual USD they'd have would still net them $2bn a year in interest. That'd still be a big hole but... What if they printed "only" 10 bn out of thin air out of 80 bn: they'd have near 70 bn bringing in 3.5 bn yearly at the moment. They don't give any of the interest back to USDT (tether) holders. So if they printed "only" 10 bn out of their arses, in less than three years they'd have these 10 bn for real on interest alone. It's still criminal (I guess) but it may not be "0% of tether are backed". People have tried to run the maths on how much money entered the cryptocurrency world (with Coinbase giving a huge hint). Centre (Circle+Coinbase) has really $24 bn backing their USDC coin (they publish the individual US short term treasuries bill number). USDT (tether) is much older than USDC. Did they cheat? Most certainly. Did they "fake it 'till they made it", helped, by sheer luck, by interest rates going like crazy? I think it's possible.
- ukoki 3y agoI think the fraudulent route to solvency is even simpler than that: 1. Make Tethers out of thin air and sell for BTC 2. BTC price goes up because crypto boom 3. Sell enough BTC for USD to back the fake Tethers you made up in step 1 4. Balance sheet now looks legit, and you even have BTC to spare to buy yachts for everyone.
- SilasX 3y agoTether absolutely had the chance to become solvent in the weekend of the SVB collapse. In that time, everyone was rushing out of USDC and DAI into Tether (USDT). Liquidity pools were drained of all their USDT and smartcontracts showed all available units being borrowed at 100+% APR. Tether was trading for $1.01-$1.10 that entire weekend, with demand insatiable. They could have repeatedly issued new Tethers and sold them for more than a dollar[1], while only incurring a dollar of liabilities. Coinmarket cap shows the USDT market cap going up by about $2 billion during that weekend, but it's not clear if they were using this strategy. (which would have profited ~1-10% of that figure). [1] or, depending on how much risk they wanted to take, traded them for USDC and DAI! Those were trading for as little as $0.90.
- kylebenzle 3y agoThe ETF will have to be approved BEFORE Tether is brought down. The powers that be need a way to control the price, an ETF is the easiest but until then they have Tether. Why else would the US allow the largest counterfeit money printer to continue for long?
- lavezzi 3y ago> Why else would the US allow the largest counterfeit money printer to continue for long? Incompetence.
- rchaud 3y agoThe US' incompetency usually doesn't extend to protecting the primacy of the dollar.
- halfcat 3y ago> Why else would the US allow the largest counterfeit money printer to continue for long? Are you taking about tether or the fed?
- kylebenzle 3y agoTether, sorry and thank you, I'll edit that.
- crypt1d 3y agoWhile I can see how it helps clear the bad image of the industry, the two are not directly related. The ETF was/is going to get approved regardless.
- smt88 3y agoHow does it help clear the bad image? There are seemingly no large crypto orgs left that are untouched by criminal convictions.
- lavezzi 3y agoNo large crypto orgs left? Tether has a market cap of $88bn alone.
- grey-area 3y agoTether has been convicted of fraud.
- rchaud 3y agoIf that meant anything the USDT to USD peg would collapse as it could no longer be redeemed for fiat.
- grey-area 3y agoIt means something, and tether will collapse.
- martin8412 3y agoMost people can't redeem USDT from Tether... Read their terms. You can only redeem USDT for USD if you bought directly from them, and even then it needs to be more than $100k. If you fulfill those two requirements, they'll let you redeem if they want to. They state in their terms that redemption is entirely at their discretion, and they can just say no if they gambled the reserves away.
- 3y ago
- 2OEH8eoCRo0 3y agoHow will the BTC ETF even work? I'm not super savvy with money but why would anybody buy an ETF and pay their fees when the assets in the ETF don't grow or give dividends? How will they secure those assets? Cold wallet in a vault? What happens if they do their audit and the backing coins aren't there (stolen) or there's a hardware failure on the cold wallet?
- landemva 3y agoLike gold ETFs, they can do BTC synthetically via futures or have a custodian take custody. The interesting ETF will be for Ethereum because a custodian can possibly stake it and earn yield. ETH can earn within the basic protocol.
- 2OEH8eoCRo0 3y agoRight but gold isn't easy to steal. Bitcoin can disappear from a cosmic ray, hardware failure, remote theft, software glitch, etc.
- landemva 3y agoSounds like digital assets are not for you. Gold and silver coin in your pocket are a time-tested approach.
- meowkit 3y agoGold isn’t easy to steal because there are centuries worth of physical security demands that have evolved to protect it. Its relatively easy to take a chunk of metal from someone otherwise. Nothing you listed applies to bitcoin besides remote theft. The whole point of a blockchain is be fault tolerant in the face of those real failures. Remote theft occurs from a failure to secure your private keys. That’s human error and will be resolved in the same way as gold with… custodians aka a bank.
- skywhopper 3y agoGold isn't easy to steal because it's heavy, and the more you steal, the more it weighs. There's a big difference between stealing an ounce of gold and stealing five tons of gold. But there's no difference in "weight" between stealing 0.1 BTC and 10,000 BTC. Also, securing physical assets is much easier than securing digital assets.
- huitzitziltzin 3y agoAmazing that it’s impossible to tell whether you are a real crypto booster or joking at their expense.
- npalli 3y ago"True crypto has never been tried"
- arcticbull 3y agoI too enjoy the no true Scotsman fallacy
- notJim 3y agoI dunno, people always invoke it in situations that are similar, but not quite applicable.
- from-nibly 3y agoNo true "No true Scotsman fallacy"
- akoboldfrying 3y agoEh... Folks are just butthurt that they didn't get in on the original Scotsman like I did. They poured scorn then, but I'm up to my eyeballs in bagpipes now
- robocat 3y agohttps://en.wikipedia.org/wiki/No_true_Scotsman https://en.wikipedia.org/wiki/No_true_Scotsman - I've been meaning to look it up for a while.
- optimalsolver 3y agoNo true ScotsCoin.
- 3y ago
- bfung 3y agoWhy does BTC need an ETF at all, doesn’t that defeat the purpose of owning one’s own wallets? Also… exchanges defeating the purpose of decentralization…
- chollida1 3y agoThe simplest answer is that alot of people would like to hold BTC in a tax advantaged account and an ETF wrapper is the easiest way to do this. Others would like to buy it via retirement plans and having an ETF makes this doable. Those that want to hold BTC incase the US dollar collapses will hodl their own BTC. Those that want to hold BTC incase it really appreciates will hold it via an ETF in a tax advantaged account so they don't have to pay taxes on their gains, depending on the account type.
- vizzah 3y agoand those few.. who still expect to use it for payments..? =) LOL.
- bfung 3y agoAh, nice! Applies regardless of what the underlying asset is ~ some good ole’ tax engineering.
- thisgoesnowhere 3y agoJust say exit liquidity. It's faster.
- rossdavidh 3y agoThe purpose of decentralization was defeated a long time ago, I'm afraid.
- bfung 3y ago<sarcasm>I guess people trust Blackrock and CZ on setting BTC prices more than they trust the greenback</sarcasm> Also, CZ (pleads guilty to money laundering charges): https://news.ycombinator.com/item?id=38366729 https://news.ycombinator.com/item?id=38366729