Re:U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
by seppel on Wednesday January 31, 2018 @12:55PM
(#16275853)
> and then print a bunch of unbacked USDT and use them to buy BTC.
But who is buying and HOLDING the USDT? Sorry that I repeat myself but this is the whole point I want to understand.
Yes, somebody is selling USDT for BTC, I get that. It is nice but I want to understand the other side. Who is buying USDT for BTC? Why? Somewhere there is a billion of USDT lying around. Somebody bought it. Somebody is keeping it. WHY is somebody keeping it? Why is somebody buying more and more of it?
I think it is a very crucial point to understand. Yes, maybe you can convice some fools to sell their BTC for USDT. But they will notice, because there is nothing that you can do with USDT except buying BTC. So they will BTC again and try to cash out somewhere else. So who is holding the one billion of USDT?
Re:U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
by makomk on Wednesday January 31, 2018 @05:46AM
(#16272935)
I'm not sure how effective that would be in practice. Total Tether issued as of the end of 2017 was about 1.3 billion. Coinbase booked over $1 billion in revenue in 2017; the amount of money going into them was presumably much bigger than that. (There's also weak evidence from price differences etc between exchanges that the bulk of the demand has been coming from Coinbase/GDAX.)
Get people to believe it's backed 1:1 by USD when it's not, so that it is viewed as equivalent to USD but less problematic in regulatory terms, and then print a bunch of unbacked USDT and use them to buy BTC. To the market, the effect is as if a whole lot more actual USD were chasing BTC, effectively looking like higher demand.