Breaking: Tethers Coming to the Rescue as Bitcoin Slides Below $10,000
Update as of November 29, 23:20 CET: Another tranche of 24,999,000 Tethers is being approved right now, as Bitcoin dropped by thousands, crashing to $9,700 from recent heights. Where this move would lead is anyone's guess, but the timing of the issue seems too perfect:
The story of USDT tokens, or Tethers, is becoming stranger. Just as Bitcoin had a thousand-dollar day, easily moving from $10,000 to $11,000, the Tether group printed two tranches of a total of 45 million Tethers from its usual mint address.
In total, since November 26, 75 million newTethershave enteredcirculation, smoothing out or affecting the trading not only of BTC, but of altcoins as well.
The expansion of Tethers in November matches all too well the growth of Bitcoin, and despite the inclusion of fresh fiat, Tethers are in fact affecting more exchanges, especially as a margin lending tool. But Bitfinex still leads and may be distorting the price of BTC.
PonziCoin 101.1. Print Tethers 2. Inflate Bitcoin Prices. 3. Everyone gets excited, opens coinbase account. 4. Sell Bitcoins bought with counterfeit money for real money. 5. "See! THE MONEY IS THERE!" pic.twitter.com/w1x3zkXu8y — Bitfinex'ed🔥 #DontGetTethered (@Bitfinexed) November 28, 2017
Bitfinex sure didn't waste no time with those counterfeit Tethers. I wonder when people start to get just a little suspicious. The higher this goes, the more counterfeiting Bitfinex has to conduct. pic.twitter.com/OrVwr9YXJ4
In addition, by causing Bitcoin's price to rise, the printers of Tether could buy BTC, sell it at a higher price and receive actual dollars. According to experts, such a dishonest move, relying on fresh cash to prop up both Tethers and Bitcoin price, could be discovered in an audit, tracking the immutable, time-stamped transactions on the blockchain.
According to the analysis of Bitfinex'ed, it only takes about 20 million Tethers to boost the market cap of BTC by $5 billion. Of course, the price of Bitcoin only reflects immediate trading and market cap is a trivial arithmetic calculation, but it creates a significant number in buyers' eyes, and a FOMO attitude.
In 2017, the expansion of Tethers roughly resembles the peak in cryptocurrencies: from 10 million at the start of 2012 to 770 million at the end of November.
Paradoxically, doubts about Tethers may lead to a buying spree of altcoins, which may be seen as a safer bet, and at least have some utility. In those cases, the growing price of some assets may be a sign of a "bank run" on Tethers.
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