Bitcoin and Tether

[[MPGH]Dave84311]

If all you can do is call me dumb without an argument, then you are dumb.



You are forgetting that iFinex is a parent company of Bitfinex, and Bitfinex is a firm that earns literally hundreds of millions of dollars every day in the form of trading fees, margin funding fees, private OTC sales, frontrunning, etc etc etc. You have no idea how much money they are minting. It is not hard at all to believe that every USDT is backed by one USD. And even if it is not, you don't seem to understand that if people can exchange between USDT and USD freely then there is literally no problem at all. It is a theoretical problem, not a practical one, since it doesn't cause an inconvenience to anyone.

Except the two aren't supposed to be linked. It doesn't create a problem to anyone until they are trying to cash out. There will be bagholders, which is against the premise of USDT which is supposed to be cashable at any time to a dollar. They even went as far as to remove that from their website, until people called them out on it. They won't be able to hold up to an audit and the cookie will begin to crumble and probably take the whole cryptocurrency market with it. There are only about 10m USDT in circulation, whereas there are well over a billion issued. Do the math.

[alia_armelle]

Except the two aren't supposed to be linked. It doesn't create a problem to anyone until they are trying to cash out. There will be bagholders, which is against the premise of USDT which is supposed to be cashable at any time to a dollar. They even went as far as to remove that from their website, until people called them out on it. They won't be able to hold up to an audit and the cookie will begin to crumble and probably take the whole cryptocurrency market with it. There are only about 10m USDT in circulation, whereas there are well over a billion issued. Do the math.

I don't think you've fully done your research.

At every given point in time, every person has been able to cash out USDT to USD, and there has never been a point where any "collapse" of any sort happened. Saying that one will eventually happen is tinfoil hat conspiracy level shit, and I'd think you wise enough not to indulge in that sort of thing.

And, a billion is probably a lot to you, but in the crypto world it is a laughable amount. A billion dollars would barely move the price of BTC $50. Hypothetically, if all USDT in the world evaporated, then "the whole cryptocurrency market" would be just fine, because such a tiny amount is close to inconsequential. This whole thing has been blown massively out of proportion.

If you are game, I'd like to make a wager - I'm willing to bet 0.1 BTC that Tether will not collapse in the next 1 year. If I lose, keep my .1, if I win, you pay me an additional .1. If .1 is not enough I'm happy to make it higher for you

[Jacky]

Bitcoin is just on a hype at the moment because new people coming in the world of cryptocurrency read stories about how this dude or how this guy went from being the poorest kid in the country to the richest and thought it will be an "ezpz lemon squeezy" get rich fast. BTC is so stupid , slow , main currencies to buy dem guns in tor, even my grand ma walks faster. never used ETH but i heard that it is more simple than bitcoin

[Football6]

I don't think you've fully done your research.

At every given point in time, every person has been able to cash out USDT to USD, and there has never been a point where any "collapse" of any sort happened. Saying that one will eventually happen is tinfoil hat conspiracy level shit, and I'd think you wise enough not to indulge in that sort of thing.

And, a billion is probably a lot to you, but in the crypto world it is a laughable amount. A billion dollars would barely move the price of BTC $50. Hypothetically, if all USDT in the world evaporated, then "the whole cryptocurrency market" would be just fine, because such a tiny amount is close to inconsequential. This whole thing has been blown massively out of proportion.

If you are game, I'd like to make a wager - I'm willing to bet 0.1 BTC that Tether will not collapse in the next 1 year. If I lose, keep my .1, if I win, you pay me an additional .1. If .1 is not enough I'm happy to make it higher for you

There are several things wrong with this.

Firstly, the amount of people that have actually cashed out from USDT to USD is a fraction of the current 2. whatever billion currently circulating. One of the main uses of tether is to be a way of cashing out of BTC etc. into a stable coin, without having to sell all of it, then rebut in later on, meaning you pay more in both tax and fees. There is no proof that there would be enough USD backing USDT for a large chunk of the tether holders to cash out.

Secondly, a billion dollars of bitcoin either bought or sold at once in a day would have a huge effect on bitcoin. Its pretty simple economics to understand that the market cap does not equal the total number of funds invested. The much more important factor in this case in the daily volume of bitcoin, which is around 6 billion USD. In this case, if someone were to attempt to dump 1 billion $ worth of bitcoin at once, it would completely crash the price of bitcoin, seeing as roughly 1/6th of the daily amount traded is being sold.

Also there are the usual arguments such as tether has been artificially propping up bitcoin for months now during low points and when removed will crash it etc, which you seem to completely ignore because you believe that 2 and half billion dollars leaving the market in one day is not going to crash crypto prices.

However, I do agree with you that Bitfinex and tether likely do have the money to back each tether, but that is not the only fucking problem here. When tether is investigated for its audit, some shady shit may be exposed, which will be just as bad as tether not having the money.

Any negative news released by tether about USDT is going to cause a shit storm and a crash. The market is incredibly volatile, and mainstream media will blow it out of proportion, crashing the price further. Everything coming from tether needs to be positive, otherwise its pretty obvious a shit storm will follow.

[[MPGH]Dave84311]

There are several things wrong with this.

Firstly, the amount of people that have actually cashed out from USDT to USD is a fraction of the current 2. whatever billion currently circulating. One of the main uses of tether is to be a way of cashing out of BTC etc. into a stable coin, without having to sell all of it, then rebut in later on, meaning you pay more in both tax and fees. There is no proof that there would be enough USD backing USDT for a large chunk of the tether holders to cash out.

Secondly, a billion dollars of bitcoin either bought or sold at once in a day would have a huge effect on bitcoin. Its pretty simple economics to understand that the market cap does not equal the total number of funds invested. The much more important factor in this case in the daily volume of bitcoin, which is around 6 billion USD. In this case, if someone were to attempt to dump 1 billion $ worth of bitcoin at once, it would completely crash the price of bitcoin, seeing as roughly 1/6th of the daily amount traded is being sold.

Also there are the usual arguments such as tether has been artificially propping up bitcoin for months now during low points and when removed will crash it etc, which you seem to completely ignore because you believe that 2 and half billion dollars leaving the market in one day is not going to crash crypto prices.

However, I do agree with you that Bitfinex and tether likely do have the money to back each tether, but that is not the only fucking problem here. When tether is investigated for its audit, some shady shit may be exposed, which will be just as bad as tether not having the money.

Any negative news released by tether about USDT is going to cause a shit storm and a crash. The market is incredibly volatile, and mainstream media will blow it out of proportion, crashing the price further. Everything coming from tether needs to be positive, otherwise its pretty obvious a shit storm will follow.

+1, minus the bit about the backing. They are doing shady shit to begin with, why even come up with Tether and then lie about it? Oh right... compliance
@alia_armelle

It's difficult to exchange USDT for USD atm, and even then no one is talking about the past.

1 billion is a ton of money when it comes to the cryptocurrency markets (also it's about 2.23 now). If you account for how many coins are currently trading hands and how many people haven't lost due to losing their keys, death and various other reasons, the market is much smaller than you think.

[alia_armelle]

168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao
@Dave84311 @Football6

Put your money where your mouth is and bet 0.01 that USDT will collapse

[KanyeWest]

168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao
@Dave84311 @Football6

Put your money where your mouth is and bet 0.01 that USDT will collapse

savage, lmao

[[MPGH]Dave84311]

168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao
@Dave84311 @Football6

Put your money where your mouth is and bet 0.01 that USDT will collapse

No one is saying it would collapse in a year, stupid. Why would I bet that. You can't state facts backing up what you're saying, so you spew shit.

[alia_armelle]

No one is saying it would collapse in a year, stupid. Why would I bet that. You can't state facts backing up what you're saying, so you spew shit.

You are the one saying I "spew shit" right after I gave you exact numbers, it looks like you are the one with no facts.

"168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao"

USDT is 0.8% of the crypto economy. RIP Logic, Dave

And if you don't think it will crash in a year, then when will it? Seriously please put your money where your mouth is, I'm open to a 1 year or 5 year or even a 10 year bet

[ShiftKeyBroken]

You are the one saying I "spew shit" right after I gave you exact numbers, it looks like you are the one with no facts.

"168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao"

USDT is 0.8% of the crypto economy. RIP Logic, Dave

And if you don't think it will crash in a year, then when will it? Seriously please put your money where your mouth is, I'm open to a 1 year or 5 year or even a 10 year bet

you are silly. tether corp is yet to prove that usd is even there in their reserve. until that happens there will always be a lingering question about whether this whole thing is a tether-caused bubble

[Football6]

You are the one saying I "spew shit" right after I gave you exact numbers, it looks like you are the one with no facts.

"168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao"

USDT is 0.8% of the crypto economy. RIP Logic, Dave

And if you don't think it will crash in a year, then when will it? Seriously please put your money where your mouth is, I'm open to a 1 year or 5 year or even a 10 year bet

You don't seem to understand basic economics. There is not 168 billion in BTC. The total circulating supply of bitcoin would be worth that, if every coin could be sold for the current price. However it can't, and if you don't understand why it can't then you should stop investing until you have a basic grasp of economics tbh. The daily volume is what matters, as it shows how much is being traded each day. It is the most significant figure by far, because it shows the liquidity and use of each coin, rather than what the total might be worth in an impossible scenario. Tether makes up between 1/5 and 1/6 of the daily volume, which is easily enough to fuck the market if a crash happens.

[Bernard]

You are the one saying I "spew shit" right after I gave you exact numbers, it looks like you are the one with no facts.

"168 B in BTC. 82 B in ETH. 2 B in USDT. And you still think USDT can crash the crypto economy? Lmao"

USDT is 0.8% of the crypto economy. RIP Logic, Dave

And if you don't think it will crash in a year, then when will it? Seriously please put your money where your mouth is, I'm open to a 1 year or 5 year or even a 10 year bet

No one is saying it would collapse in a year, stupid. Why would I bet that. You can't state facts backing up what you're saying, so you spew shit.

Just because there is 189B in Bitcoin and 83B in Ethers' market caps doesn't really mean shit. Market cap only tells us the value of a single bitcoin times the current circulating supply. In reality, there is no where near 454B dollars in terms of the value of crypto if say everyone sold their cryptos at the same time. The point of Tether is to act as a "stablecoin". Currently a ton of markets rely on Tether when it comes to trading pairs and liquidity, hence why Tether usually has the 2nd or 3rd highest trading volume. If suddenly Tether turns out to be full of shit, your Tethers aren't backed by anything, then obviously no trader would accept Tethers for anything. Suddenly a bunch of markets have an issue with all trades involving Tether as anyone who owns Tether is trying to trade it for something worth anything. Suddenly assets become a lot less liquid, the value of cryptos will plummet (or the value of cryptos will skyrocket if for some reason some traders are accepting worthless tethers), etc. In the end, major market corrections but it won't be the end of crypto since people trade using bitcoin pairs a lot as well.

TL;DR Tether matters a lot more than you think due to it's really high trading volume and the fact that tons of markets rely on it in many of its trading pairs.

Rebuttal to your points: alia you are ignorant beyond belief. What is your proof that "Bitfinex is a firm that earns literally hundreds of millions of dollars every day in the form of trading fees, margin funding fees, private OTC sales, frontrunning, etc"? Do you think they're a Fortune 500 company or some shit? Even some Fortune 500 companies probably don't earn hundreds of millions of dollars every day. And then you say "You have no idea how much money they are minting. It is not hard at all to believe that every USDT is backed by one USD. And even if it is not, you don't seem to understand that if people can exchange between USDT and USD freely then there is literally no problem at all." You say, even if it's not backed, people can exchange USDT to USD. HOW?!?! Where the fuck is this magic money coming from if it's NOT BACKED? Is the government going to give people money? Are USDTs backed by the US government? AFAIK, NO. Ever heard of a "run on the bank"? Cause that's basically the issue here. And no it's not some crazy conspiracy theory, it's just a precaution to have USDTs backed at all times (like it's suppose to be), in the case of a run on the bank (which shouldn't happen, BUT WILL if it turns out Tether is full of shit and has liquidity issues). Take some history classes, learn about the Great Depression or any recession for that matter, take some econ courses, learn about inflation or something, maybe some business or finance courses. You clearly have only an extremely basic understanding of how markets and the economy work.

Btw, if you'd like to buy 1 million BernardCoins lmk. I'll sell them to you for the cheap price of $800,000 dollars. I swear they're all backed by 1 million US dollars. 20% off! It's a trustworthy replacement for Tether.

- - - Updated - - -

You don't seem to understand basic economics. There is not 168 billion in BTC. The total circulating supply of bitcoin would be worth that, if every coin could be sold for the current price. However it can't, and if you don't understand why it can't then you should stop investing until you have a basic grasp of economics tbh. The daily volume is what matters, as it shows how much is being traded each day. It is the most significant figure by far, because it shows the liquidity and use of each coin, rather than what the total might be worth in an impossible scenario. Tether makes up between 1/5 and 1/6 of the daily volume, which is easily enough to fuck the market if a crash happens.

Thank you for understanding basic economics.

[ShiftKeyBroken]

@Bernard. well to be fair it is very easy to see how much bfx makes. they make a set percentage of each order, and you can cut away a reasonable estimate for server costs, salaries, and such. the total is easily many hundreds of thousands every day even after cutting server costs. they do make a shit ton, the data is in the order book for everyone to see openly. having two billion is not far fetched at all

[Bernard]

@Bernard. well to be fair it is very easy to see how much bfx makes. they make a set percentage of each order, and you can cut away a reasonable estimate for server costs, salaries, and such. the total is easily many hundreds of thousands every day even after cutting server costs. they do make a shit ton, the data is in the order book for everyone to see openly. having two billion is not far fetched at all

https://www.bitfine*****m/fees

The highest Bitfinex fee I could find was 0.2% for taker fees. As of the writing of this post, the trading volume in the last 24h was $555,815,851. 0.2% of $555,815,851 is $1,111,631.70. And that is using the highest fee for takers (makers are charged less in fees). However, this estimate does not include money they earn based on margin trading which may be another large source of income. My ASSUMPTION however is that most of their earnings come from maker/taker fees. And then you do have costs and what not. So my estimate is they don't earn more than 5 million daily, and that's being generous. I WILL agree with you that if they earn a few million daily, that 2.2 billion isn't far fetched, but to me it's a coin toss. In such a volatile market, trust is paramount and the fact that I can't trust Tether due to their lack of transparency is already in of itself an issue.

[ShiftKeyBroken]

https://www.bitfine*****m/fees

The highest Bitfinex fee I could find was 0.2% for taker fees. As of the writing of this post, the trading volume in the last 24h was $555,815,851. 0.2% of $555,815,851 is $1,111,631.70. And that is using the highest fee for takers (makers are charged less in fees). However, this estimate does not include money they earn based on margin trading which may be another large source of income. My ASSUMPTION however is that most of their earnings come from maker/taker fees. And then you do have costs and what not. So my estimate is they don't earn more than 5 million daily, and that's being generous. I WILL agree with you that if they earn a few million daily, that 2.2 billion isn't far fetched, but to me it's a coin toss. In such a volatile market, trust is paramount and the fact that I can't trust Tether due to their lack of transparency is already in of itself an issue.

thanks for the figures. well if their max income from trading fees in one day alone is ~$1mm (not counting funding and margin fees which are usually 10-20x more) then it is quite evident that they make a shit ton in profit. easily over $2mm a day. oh and don't forget they do otc sales too, which doubles that figure.