Re:An $814M Mystery Near the Heart of the Biggest Bitcoin Ex...
by panarky on Tuesday December 05, 2017 @02:34PM
(#15854988)
> As long as people want to short bitcoin there will be lots of demand for tether
Interesting observation.
Most people here are say fractional-reserve Tethers are inflating the exchange rate of other cryptocurrencies.
But that doesn't really make sense, because buying cryptocurrencies means selling Tethers, pushing down the exchange rate for Tethers. But Tethers are trading 1:1 for USD, so something doesn't add up.
You say that Tether demand is strong because traders are selling Bitcoin, and that's propping up the exchange rate of Tether.
So what happens if a Tether fraud is revealed and traders want out of Tether -- does the Bitcoin exchange rate go even higher?
Interesting observation.
Most people here are say fractional-reserve Tethers are inflating the exchange rate of other cryptocurrencies.
But that doesn't really make sense, because buying cryptocurrencies means selling Tethers, pushing down the exchange rate for Tethers. But Tethers are trading 1:1 for USD, so something doesn't add up.
You say that Tether demand is strong because traders are selling Bitcoin, and that's propping up the exchange rate of Tether.
So what happens if a Tether fraud is revealed and traders want out of Tether -- does the Bitcoin exchange rate go even higher?
See https://en.wikipedia.org/wiki/Gresham%27s_law where Tethers are the "bad money" causing traders to hoard Bitcoin, the "good money".