"...reaching a peak of $20,000 for a single bitcoin before a spectacular plunge in value in December 2017 from which it has never really recovered (it is trading at $3,800 at the time of writing)."
The present episode is quite interesting and they are merrily printing tethers which are probably being used to buy bitcoin and pump the price now that tether have dropped the insistance that tethers are backed by dollars. $1.4bn new tethers since the start of April coinciding with bitcoin going from $4100 to $9400. God knows where it ends - is there anything to stop them printing a trillion tethers and sending each bitcoin to $10 million?
Is the following an accurate summary of your position:
"There actually aren't dollars that are being moved into tether's accounts but fabricated database numbers. These fabricated numbers are then exchanged for bitcoins but the other people of that trade (the people buying tethers with bitcoins) somehow never redeem these tethers. Despite the tether to dollar exchange rate not at a discount there's a mass delusion. This delusion will continue until bitcoiners buy 10 million tethers for one bitcoin. The dollar-bitcoin market doesn't affect the price/supply of bitcoin."
Because that's what it appears to be. Do you know how a eurodollar works? If not, you would learn much from just that instrument.
BTC/Tether and BTC/USD are different trading pairs. If they printed a trillion tethers tomorrow and started buying bitcoins with them presumably people at some point would be unwilling to exchange BTC for tether. The BTC price might rise to 10 million tethers but the USD price would remain unaffected, effectively breaking the peg.
This is true although Tether can maintain USD:USDT at one to some extent if either they have the dollars or if they have bitcoin and it's going up. They can then sell their bitcoin for dollars to buy the USDT. That falls apart if bitcoin drops.
There is some guess work here but I'm refereeing to Tether the company https://tether.to/ which issues tokens I was refereeing to as tethers with the symbol USDT, and its affiliated entities. They used to have them backed 1:1 by real US dollars and still are I think over 50% backed by real USD but due to various issues it's not 1:1 any more. They now say:
>Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.
The worry is instead of one US dollar coming in and one USDT being issued that an IOU from an insider or "affiliated entity" comes in saying I owe you a hundred million USD, Tether issues them 100 million USDT in return and then they punt it on buying bitcoin. Assuming bitcoin double the entity can pay back and bank $100m in profits which is obviously tempting for some less ethical people. The danger is bitcoin falls, they can't repay and default on the IOU.
I can only assume that $3800 figure came from Feb-March, meaning this article was written months before publication and not revised prior. Kind of makes sense...
Was just about to post that tidbit. I think people who have just about trippeled their investment in Bitcoin since February would argue that it's going through a pretty hefty recovery at the moment.
r/buttcoin posters are some of the most insufferable people on reddit, and that's saying a lot. It takes a special kind of person to frequent a community specifically made to hate on something.
the "the new fascist and nationalist movements arising in Europe, Asia, and the Americas" sets the tone for the rest of the article. typical "left-winger" who read too many introductions.
Yeah, about that....