It's a big deal from the standpoint that tether stepped in, printed ~ a billion USDT over the past three days, and prevented further plunging. Someone should investigate that...
Reminder, if you're invested in crypto long term, you'd better say a prayer every night that Tether is actually backed by ~$180B of liquidity.
Does anyone actually believe that Tether is backed by anything? I know there are at least a few companies that have to pretend Tether is backed by something. But I can't really believe anyone saying it. It'd be sort of like if someone just declared Madoff never really ran Ponzi scheme. It was just a big misunderstanding.
Furthermore does it even really matter if Tether is backed by anything? My understanding is they've always maintained an absolute veto on any redemption. So tehter could be backed by Trillions in assets and it'd be irrelevant.
Tether holds closer to 200B USD reserves (customer money) and keeps all interest on that, it's a ridiculously good business. Jeopardizing that in any way would be absurd.
Just assuming treasury returns they're making more than 7B USD profit a year with just a couple of employees.
You're assuming that the 200bn is all customer money. This is very doubtful to me considering that many times Tether magically starts minting billions of new coins to buy Bitcoin whenever Bitcoin prices start falling
You're also assuming that they make 7bn in profit per year just by keeping this rdiciulously large amount of money in a bank, but their own notation says that only 105bn is held as US treasury bills. The rest of the money is effectively invested, whether in gold or bitcoin or corporate bonds or loans. All subject to going down aswell as up.
Luckily for the cryptocurrency sector, Tether makes it so ridiculously hard to turn Tether into money that their bullshit probably won't be discovered for a long time, so the make believe valuations of bitcoin can stay as they are
The potential reward for putting it in something riskier is enormous. You and I might consider $7 billion/year to be plenty and there's no point in chasing higher returns, but we tend not to be the sort of person who is in the position to control a fifth of a trillion dollars in the first place. Investing it in something riskier to make more money would be foolish but it's also something that's been done many times before.
Tether is the defacto central bank for Bitcoin. Since iFinex isn't a country, doesn't have a GDP, and doesn't have a military, MMT doesn't really apply to them. So yes, it's very important, especially during a significant Bitcoin contraction. Tether represents 8% of Bitcoin's (liquid) market cap, and BTC's market cap is already overly inflated due to wash trading.
A reasonably common belief among people who have studied the issue is that Tether was at one point unbacked (see NY AG report), and likely fudged their numbers a bit through the use of corperate paper which was plausibly worth $1 but practically could be bought for less than $1, but they have since made enough through various investments that they could now plausibly be fully backed.
A tether truther, in this day and and age? 2017 called...
The passing of GENIUS act marks one of, possibly the largest banking regulatory changes in the US. The stablecoin industry is very legitimate, has very firmly established guardrails and rules, and tether is working fast to become fully compliant.
This "TeTheR iS a SySTEmiC RiSK tO eVEryThiNG" mentality is fully dead. Tether is compliant in a regulated industry, tether is backed, and tether is quickly running away with the entire market.
A company actively navigating a huge regulatory change is not the same as a flagrant scam hiding in plain sight.
I don't know why I'm bothering to reply. Tether truthers are modern day financial luddites, willingly blind and ignorant of the sea change taking place in plain sight after the passing of GENIUS.
I don't have a dog in this fight. I don't much care about crypto and know pretty much nothing about Tether beyond the fact that they have a USD-linked coin, plus what I just read on Wikipedia. "They're on the up-and-up because they say they're going to be complying with US law in the future" just isn't a very convincing argument.
1. Bloomberg Businessweek — “Anyone Seen Tether’s Billions?” (Cover Story, Oct 2021) — a deep investigation into Tether’s backing, counterparties, and leadership. www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether
Apologies, I meant about them printing the money Friday. Trying to understand the relationship with them stabilizing bitcoin prices somehow but also why everyone is worried about USDT and it being "real"
Assuming it happened, if Tether didn't de-peg due to this then it was probably the right thing to do. If they printed it and bought BTC in the dip they are massively ahead since BTC already regained a third of what it lost in the wipe.
> Reminder, if you're invested in crypto long term, you'd better say a prayer every night that Tether is actually backed by ~$180B of liquidity.
As a long-term holder of Bitcoin I do not see why I should lose any sleep due to Tether risks. Why should I care even if it de-pegs?
On the liquidation itself: leveraged bets gone wrong will get liquidated, whether the bets were on stocks, currencies, Treasuries, crypto or grain futures. BoJ, for example, regularly makes rapid large buys to shake out leveraged yen speculators. I do not see anything concerning or unusual with this week's crypto shakeout. My 2c.
Presumably you should care because tether is (per the OP argument) pushing the value of the entire crypto ecosystem up and the Bitcoin price is a primary beneficiary of that.
Fair, but there are so many things pushing the Bitcoin price up and down: approvals and rejections of various ETFs, tax law changes around the world, corporate adoption and lack thereof, successes and failures of L2 networks, etc. And each of those can cause comparable long-term movement in the BTC than tether's or altcoin's adoption or collapse.
As a long-term BTC holder my primary reason is protection against debasement. It is a volatile asset, historically with 50-80% drawdowns from time to time. But as long as I think it still serves as a hedge against debasement I am happy to hold a portion of my net worth it in.
Growing up, I have seen fiat go worthless twice in my life: once the government zeroed out previous money overnight, once it hyperinflated fiat by over 1000x in two years. An 80% temporary drop is peanuts compared to that.
There was a flash crash down to ~$104K that wiped out leveraged traders. Liquidation cascades are relatively uncommon and the last one was in 2021 IIRC.
it happened really fast so a lot of positions were liquidated automatically by force, rather than voluntarily by the user. that's really the main distinction
The wild moves occurred on alt coins, some went down 80%.
Mr. President's own World Liberty Financial for example went down from 18c to even 6c in an instant.
The real story here is insider trading and corruption by people close to President Trump, who knew, down to the exact minute, when to short BTC and ETH.
BTC, meanwhile, being a scarce asset, will recover as fiat supply increases with time.
Yeah, the commotion is a bit silly. "The crash" basically brought the price of BTC to the level it was comfortably at two weeks ago.
I think disproportional media interest in last two weeks of appreciation and "the crash" is a failed attempt to finally kickstart this BTC bull or bear market. Somebody is getting impatient with last two years of steady growth.
- Hackers likely exploited a Binance collateral loophole in its Unified Account system to trigger mass liquidations on October 11.
- Collateral assets USDE, wBETH, and BnSOL crashed sharply, wiping out traders and market makers as liquidation prices relied on Binance’s spot order book.
- The attack happened between Binance’s oracle update announcement and its implementation, suggesting precise timing and planning.
> In addition to the rationing system, the government provided food through soup kitchens in the cities. As the intensity of the famine increased, the reliance on soup kitchens increased. In April 1945, 1.8 million people in the cities were served daily. One pint of soup per person was the normal ration. The quality of the soup deteriorated over time and some people considered it inedible. The caloric content of a soup ration diminished from 483 calories to 268 calories. The soup served was often made from sugar beets, tulip bulbs, and potato peels. Pet dogs and cats were sometimes eaten.
Just give us a date/year/etc in which you think the value of bitcoin will go to zero
If you are unable to do that, then you implicitly agree, as pretty much everyone does now, that bitcoin has an intrinsic market value that will remain over an indefinite time horizon
No, I don't think bitcoin could go to zero- hardly seems like a rational opinion at this point to think it could go to zero (short of a human extinction event, or near-extinction event, or some other extremely remote abstract theoretical scenario)
How about near-zero? It has had a Damocle's sword hanging since inception, in the form of massive, unused (yet) stashes of bitcoin. It's value is in part propped by the hope of those stying unused.
To play Devil's advocate, regular finance is mostly bits as digital assets. Banks can't turn them into money without going bankrupt. A sizable chunk of the global economy is electrons and ideas.
To parallel with videogames, the dominant game of capitalism has been captured by a small group of griefers using glitches and exploits to win.
The article doesn't really explain what happened but a lot of the alt coins were bought with borrowed money. When Trump announced the latest 100% tariffs on China the selling caused a lot of alt coins to fall such that traders were stopped out and their coins sold which caused more drops some as much as 99% in a few minutes. Then things bounced back.
"Miscommunication" is when you see mineral water on the bill when you thought it was tap water. Being that ignorant of the positions during a trade war that you started and doing it in public on Twitter is more like holding Uno cards face-out during your own game of poker.
> Amid the market's downturn on Friday, our view was that the 100% tariff announcement by Trump was a bargaining chip.
> After China's statement last night, we believe the odds of Trump's 100% tariff on China going into effect are extremely low.
"Does nothing, wins" is getting a bit out of hand: they're going back in time and winning 26 hours before they even start.
Why does "orange guy doing random thing" cause Bitcoin to go down in value?
I mean, whatever the random thing was, it seems to have nothing whatever to do with Bitcoin.
Because Bitcoin is far, far more correlated with the stock market than the proponents want to admit. Notice that gold didn't budge, "digital gold" my ass.
When folks get scared, pure speculation instruments like BTC will tank.
As far as I understand, Bitcoin is backed by energy and scarcity, much like gold: it requires significant energy to "mine" a Bitcoin, and it can't be easily duplicated, if at all. That's its intrinsic value, unlike fiat currencies that can be printed easily (correct me if I'm wrong).
I also believe that even gold has little intrinsic value, perhaps even less than steel. Ultimately, it's really a question of how valuable something is as a medium of exchange. Bitcoin is durable, portable, divisible, scarce, verifiable, and decentralized, which makes it a valuable form of currency. I suppose that's its exchange value.
> Bitcoin is durable, portable, divisible, scarce, verifiable, and decentralized, which makes it a valuable form of currency
I think for it to be a currency it has to be accepted for real world products?
A currency is also useless if it fluctuates this much because you cannot set prices for anything.
Indeed, it must have legal value. Even so, some stores accept Bitcoin and Monero (thus making them money) but won’t accept USD in Europe or Euros in the US, so you can't use them despite those currencies having legal tender status.
So yes, whether Bitcoin is money or a security remains an open question.
Isn't it the same for all mining activities, including gold? You typically spend a massive amount of energy digging and processing earth to recover a few grams of gold, and that energy isn't recoverable.
Gold's "intrinsic" value is limited to electronics contact plating and a comparatively small ("one tech company" worth of revenue) global jewelry market.
Gold's perceived value may be higher, but that's only because it's perceived, incorrectly, to have "intrinsic" value.
Gold fell on Friday and recovered over the weekend. BTC certainly remains a more speculative asset than physical gold, but the comparison is not as unhinged as you make it sound.
If BTC is the exact opposite of gold, it follows that Eth, Ripple, USDC, etc are all more gold-like than BTC. I'd be interested to hear why you believe that to be true.
BTC is a coin with longer investments and does not fluctuate as much as other cryptocoins (by %). It has a known supply (past, present and future) and predictable mining rate. It has a known finite future supply cap.
To be clear i don't believe BTC is a perfect gold analog. But if you have to pick the "most gold-like" digital asset, it would make my short list.
At a logical level, Bitcoin should be decorrelated from stocks. The fundamentals of Bitcoin network adoption and utilization are largely separate and independent.
But, at an emotional level, Bitcoin is considered a high-risk asset. So, whenever fear gets heavy in the fear/greed equation, Bitcoin is one of the first places people pull money out of as they flee to safety. It's also the "High Risk-High Return" spot for folks to plunk their "spare change" when they are feeling safe. So, in practice short term moves in Bitcoin are highly correlated to short term moves in equities.
Meanwhile, if you actually run the numbers, Bitcoin has out performed the SP500 (or even the SP10) by a large multiple over the past decade while having a volatility usually around the median of the SP500-top-10 that everyone is currently betting heavily into. People just have a hard time getting out of linear thinking and so they look at the big dips as short-term linear disasters while on a long-term, logarithmic view they have been rather boring. https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fd...
> At a logical level, Bitcoin should be decorrelated from stocks
I don't see how you get to that logic. BTC is a speculative growth asset held by the same people who speculate on securities, and for the same reason. In fact by virtue of being "pure" speculation, it should be expected to be even "stockier" than stocks! You don't buy bitcoin to influence corporate governance or derive dividend income. The only reason anyone purchases crypto is to sell it later at a higher price.
So if you need to dump an asset to backstop other debts, it's going to be your crypto wallet you reach for first. It'll crash harder, almost by definition.
1. You need it for use as a collateral asset for smart contracts. There are no crypto cops or crypto courts. Only collateral gives contracts teeth. There are many options here. Just like there are many options for collateral assets in traditional finance. But, BTC is the top dog for the role and the first choice of individuals and institutions trying to lay down the foundations of decentralized finance.
2. You are speculating that the growth of BTC's growth in value as a collateral asset will outpace the growth of other assets. This as played out well over the past decade.
> I mean, whatever the random thing was, it seems to have nothing whatever to do with Bitcoin.
I recently reviewed my investments and wrote about it on my blog, curiously around the time when US announced its tariffs around April, pretty much everything dropped, including crypto like BTC and ETH.
1) there is a lot of circumstantial evidence of insider trading before the timing of presidential tariff announcement. further the accounts that traded on hyperliquid DEX were funded 24hours before even the first tweet by the president indicating fore-knowledge.
2) crypto exchanges have a feature called auto-deleveraging which closes long and short positions to 'preserve the solvency & integrity of exchange'. apparently this got kicked in when some of the thinly traded coins just didnt have a market maker & basically floor fell out of price.
3) looks like some screwup happened (likely intentional unknown atm) with the price reporting oracle between decentrralized exchanges like hyperliquid and Centralized exchange used (binance). people are claiming intentional sabotage by binance because they have a competing dex called aster. who knows.
4) leverage play, everybody was levered up because of up-tober expectations. so even small movements wiped out peoples saving.
As many assets are held by leveraged players their prices crash when it's difficult to secure future loans at the same price. This is why seemingly random things like central bank of Japan raising rates can cause double digit crash on Nasdaq.
There is nothing to worry about if you are happy to hold the assets long term. It's an opportunity if you have spare cash. It's only a problem for those leveraged players and people who need to sell right now for whatever reason.
There is a prevailing myth that crypto is somehow above or immune to governmental actions. Nothing could be further from the truth.
The US government could mostly destroy the crypto market tomorrow with a policy change. That's all it would take. If the US government came out and said to access SWIFT and the US financial system, any financial institution is not allowed to trade fiat currencies to or from crypto currencies then that's it, it's over.
The real problem with crypto is the biggest proponents of it simply do not understand the financial system. In fact they're almost the opposite: they're proud of their ignorance. They wear it like a badge of honor, like it lets them be a better disruptor. Sometimes, that's true. But for those of us with some understanding of the financial system, we just shake our head as the crypto market relearns the lessons already baked into the financial system.
Here's another myth: currencies were never backed by gold (or silver). The US Dollar has never been 100% backed by any metal. What really backs the US dollar is the US military. Yes, we previously had a soverign promise to exchange dollars for gold but that's just a promise. We saw under FDR how that promise can simply be changed when there was a sovereign currency devaluation.
>The US Dollar has never been 100% backed by any metal.
This is not accurate but the devil is always in the details. What exactly does "backed by" mean? If we mean pre Bretton Woods (1971), then, for all intents and purposes it WAS backed by Gold, not just a promise. The federal reserve could not conjure up fiat dollars on theirs (or anybody else's) whims and fancies.
Pre-1971 US dollars could be freely traded/swapped for gold at any bank at the then rate of 1oz of Gold = $35. This was written in stone.
Of course, then Nixon did what he did in 1971, and as they say the rest is history.
p.s. The Bretton Woods Agreement/system/whatever you wanna call it, came into being in the aftermath of WWII, in 1944. This was [1] essentially an agreement that those 44 countries will use the US dollar (and by correlation, the USD<->gold peg) as long as the (US) powers that be didn't fuck it up.
p.s.2 - A lot of people don't realize that these accords were what established the IMF, and the beginning the World Bank, BIS etc.
So, what happened in 1971 and what did Nixon do?
"On August 15, 1971, President Richard M. Nixon announced his New Economic Policy, a program “to create a new prosperity without war.” Known colloquially as the “Nixon shock,” the initiative marked the beginning of the end for the Bretton Woods system of fixed exchange rates established at the end of World War II." - per US Office of the Historian.
So, yes, things can change due to government actions, and yes Bitcoin and its peers could be rendered worthless in a heartbeat, if the power that be want it.
>What really backs the US dollar is the US military
Agreed. But as always there's a time factor. This was true around that time, but not so much today in 2025. While the European military assets are not worth talking about, China and Russia both have continued developing those assets and do present an equalizer today. Are they equal to/better/worse than the US military is somewhat of a moot point. They exist. That in itself is the point.
[1] - The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia,[1] after the 1944 Bretton Woods Agreement until the Jamaica Accords in 1976. - As per Wikipedia.
It was generally understood by 1970 that the US didn't hold enough gold to fulfill the promise. You as a normal person couldn't go to any bank and get 1oz of gold though, only other countries could do that and they didn't in large amounts and so it worked out despite there not being enough gold in the US.
In the 1800s 1oz of gold was tradable for $20. The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable)
$1 used to be tradable for 1oz of silver. since silver and gold have different supplies though sometimes you could (in the 1800s) make a lot of money from this.
> The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable)
January 31, 1934. But first the US Treasury took over the US gold supply from the Federal Reserve.
Other than working in the financial industry, is there a way to really understand it? There don't seem to be many credible sources (at a level deeper than the WSJ/Bloomberg).
I don't think you need a deep resume in the financial industry nor a long education to be better off than most of the population. Those things can help for sure.
But financial literacy comes really from media literacy, asking basic questions of who is telling you something, what is their track record, who are they paid by, what are they selling and what other people say about what they say. Too many people simply react to emotions and look for confirmation bias. Also, one needs to distinguish between analysis and justification.
There's opportunities for this every day. It can be as simple as asking what a bank does or how mortgages work. You'll quickly get to a point of asking what fractional reserves are, what the FDIC does and how the government keeps banks solvent.
You then look at what a currency is and how currencies have evolved over time. The early history of currencies can largely be derived from first principles.
Example: in primitive societies, people migrated and followed food. As time went on they'd start to specialize and have excess goods and you'd end up with barter systems, even more so once you had agriculture and you started to see permanent settlements. But bartering is inefficient. You might have the leather that I want but you don't want the cheese that I have. Maybe you'll take it because you can trade it, maybe not.
So people started trading in things that they assigned value to eg silver and, later, gold. It's important to note that this value is "assigned" because, beyond jewelry, gold didn't have a lot of early utility. It has useful properties, like it's inert, fungible, divisible and hard-to-counterfeit (because of it's density).
But dealing in gold itself is awkward so political entities started creating currencies. There were IOUs and contracts but currencies eventually became a promise to exchange it for gold, if requested, by some political entity.
And this really takes us into the 20th century where countries issued currencies and they backed those with gold reserves, literally thousands of tons of gold.
It quickly gets a lot more complex from there as 50+ years ago we ended up with fiat currencies, meaning the value is set by markets instead of an agreed upon exchange rate.
You have people who think abandoning the gold standard was a mistake, often called "goldbugs". Many goldbugs moved to crypto. You can see why: the idea is that the supply of Bitcoin (or whatever) is predetermined. You can't just "print money" (they say). The truth of printing money is more complex. A big problem is the US consistently runs a trade deficit.
I'm not sure how helpful that all is. Just some random thoughts.
While it's fascinating to watch crypto bros learn exactly why the financial system is like it is, kinda like the kid eating baking chocolate, that's boring. It happens basically every day.
What's more interesting is how massive hte insider trader problem is already and it's only going to get worse. At some point it's going to undermine the financial markets themselves because nobody is going to trust it. Libertarians might get mad but financial markets, like all markets, require strong regulation to function.
A consequence of the presidential immunity decision is that Trump and his orbiters are allowed to insider trade with absolutely no repercussions. If somebody in his orbit does get in trouble, no problem. Just sell another pardon.
The US control and influence over the global financial system is a key pillar of its global power. As much as we might hear platitudes like "America First", this administration has done more to destroy the global power and influence of the US than any in living memory and it's not even close.
>Biggest crash in the history of crypto. I'm surprised this isn't on network news.
In dollar terms sure, but it's a meaningless blip percentage wise. The NASDAQ shed more than its entire market cap in the 2000s this year in a few days and it went right back up. We are in a fantasy world where numbers don't mean anything anymore.
Am I missing something obvious? Bitcoin has moved between 120k <--> 110K pretty much continuously since July.
I don't really see the move Friday as a huge deal (in the scope of the Wild West crypto is), looks like business as usual.
It's a big deal from the standpoint that tether stepped in, printed ~ a billion USDT over the past three days, and prevented further plunging. Someone should investigate that...
Reminder, if you're invested in crypto long term, you'd better say a prayer every night that Tether is actually backed by ~$180B of liquidity.
Does anyone actually believe that Tether is backed by anything? I know there are at least a few companies that have to pretend Tether is backed by something. But I can't really believe anyone saying it. It'd be sort of like if someone just declared Madoff never really ran Ponzi scheme. It was just a big misunderstanding.
Furthermore does it even really matter if Tether is backed by anything? My understanding is they've always maintained an absolute veto on any redemption. So tehter could be backed by Trillions in assets and it'd be irrelevant.
At this point there's no reason to pretend that Tether isn't likely fully backed, they're printing absurd amounts of money without any need for fraud.
This is the most profitable business in the world by many metrics.
So you're saying they buy their own Tether with profits they make elsewhere on the platform?
Tether holds closer to 200B USD reserves (customer money) and keeps all interest on that, it's a ridiculously good business. Jeopardizing that in any way would be absurd.
Just assuming treasury returns they're making more than 7B USD profit a year with just a couple of employees.
You're assuming that the 200bn is all customer money. This is very doubtful to me considering that many times Tether magically starts minting billions of new coins to buy Bitcoin whenever Bitcoin prices start falling
You're also assuming that they make 7bn in profit per year just by keeping this rdiciulously large amount of money in a bank, but their own notation says that only 105bn is held as US treasury bills. The rest of the money is effectively invested, whether in gold or bitcoin or corporate bonds or loans. All subject to going down aswell as up.
Luckily for the cryptocurrency sector, Tether makes it so ridiculously hard to turn Tether into money that their bullshit probably won't be discovered for a long time, so the make believe valuations of bitcoin can stay as they are
The potential reward for putting it in something riskier is enormous. You and I might consider $7 billion/year to be plenty and there's no point in chasing higher returns, but we tend not to be the sort of person who is in the position to control a fifth of a trillion dollars in the first place. Investing it in something riskier to make more money would be foolish but it's also something that's been done many times before.
What’s the mechanism through which they print money? I.e. if everyone decided to redeem all coins that have dollar to give.
They make 4% on treasury bonds (that's ~$4B) and they've also profited on Bitcoin and gold.
Tether is the defacto central bank for Bitcoin. Since iFinex isn't a country, doesn't have a GDP, and doesn't have a military, MMT doesn't really apply to them. So yes, it's very important, especially during a significant Bitcoin contraction. Tether represents 8% of Bitcoin's (liquid) market cap, and BTC's market cap is already overly inflated due to wash trading.
A reasonably common belief among people who have studied the issue is that Tether was at one point unbacked (see NY AG report), and likely fudged their numbers a bit through the use of corperate paper which was plausibly worth $1 but practically could be bought for less than $1, but they have since made enough through various investments that they could now plausibly be fully backed.
This sounds like black magic, ie waiting for a "bank run" to test the validity of Tether.
Yes - a common criticism of tether is that many times they have claimed to have an audit coming "soon".
A tether truther, in this day and and age? 2017 called...
The passing of GENIUS act marks one of, possibly the largest banking regulatory changes in the US. The stablecoin industry is very legitimate, has very firmly established guardrails and rules, and tether is working fast to become fully compliant.
This "TeTheR iS a SySTEmiC RiSK tO eVEryThiNG" mentality is fully dead. Tether is compliant in a regulated industry, tether is backed, and tether is quickly running away with the entire market.
Did you miss the announcement that USDT will not attempt to comply with the GENIUS act?
Yes, because they will migrate to a different compliant one. Maybe you missed that headline?
Nothing's going to migrate.
How does the GENIUS act apply to Tether, given they're not in the US and their product is not officially available in the US?
Tether will migrate to a US regulated structure
When that happens then it'll be relevant, but I don't see how it means everything is fine now.
A company actively navigating a huge regulatory change is not the same as a flagrant scam hiding in plain sight.
I don't know why I'm bothering to reply. Tether truthers are modern day financial luddites, willingly blind and ignorant of the sea change taking place in plain sight after the passing of GENIUS.
I don't have a dog in this fight. I don't much care about crypto and know pretty much nothing about Tether beyond the fact that they have a USD-linked coin, plus what I just read on Wikipedia. "They're on the up-and-up because they say they're going to be complying with US law in the future" just isn't a very convincing argument.
> tether stepped in, printed ~ a billion USDT over the past three days, and prevented further plunging
Being completely ignorant on all of these, where can I read about this?
1. Bloomberg Businessweek — “Anyone Seen Tether’s Billions?” (Cover Story, Oct 2021) — a deep investigation into Tether’s backing, counterparties, and leadership. www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether
2. Wall Street Journal — “Cantor Fitzgerald Helps Oversee Tether’s Billions in Treasurys” — on who holds and manages a large chunk of Tether’s reserves. https://www.wsj.com/finance/currencies/wall-street-firm-over...
3. CoinDesk — “Tether’s banking relationships & commercial paper exposure in newly released NYAG docs” — FOIL-sourced documents on what sat inside reserves. https://www.coindesk.com/policy/2023/06/16/tethers-banking-r...
4. CFTC (primary source) — 2021 order fining Tether over reserve claims — official enforcement record on “fully backed” statements. https://www.cftc.gov/PressRoom/PressReleases/8450-21
Apologies, I meant about them printing the money Friday. Trying to understand the relationship with them stabilizing bitcoin prices somehow but also why everyone is worried about USDT and it being "real"
Assuming it happened, if Tether didn't de-peg due to this then it was probably the right thing to do. If they printed it and bought BTC in the dip they are massively ahead since BTC already regained a third of what it lost in the wipe.
> Reminder, if you're invested in crypto long term, you'd better say a prayer every night that Tether is actually backed by ~$180B of liquidity.
As a long-term holder of Bitcoin I do not see why I should lose any sleep due to Tether risks. Why should I care even if it de-pegs?
On the liquidation itself: leveraged bets gone wrong will get liquidated, whether the bets were on stocks, currencies, Treasuries, crypto or grain futures. BoJ, for example, regularly makes rapid large buys to shake out leveraged yen speculators. I do not see anything concerning or unusual with this week's crypto shakeout. My 2c.
Presumably you should care because tether is (per the OP argument) pushing the value of the entire crypto ecosystem up and the Bitcoin price is a primary beneficiary of that.
Fair, but there are so many things pushing the Bitcoin price up and down: approvals and rejections of various ETFs, tax law changes around the world, corporate adoption and lack thereof, successes and failures of L2 networks, etc. And each of those can cause comparable long-term movement in the BTC than tether's or altcoin's adoption or collapse.
As a long-term BTC holder my primary reason is protection against debasement. It is a volatile asset, historically with 50-80% drawdowns from time to time. But as long as I think it still serves as a hedge against debasement I am happy to hold a portion of my net worth it in.
Growing up, I have seen fiat go worthless twice in my life: once the government zeroed out previous money overnight, once it hyperinflated fiat by over 1000x in two years. An 80% temporary drop is peanuts compared to that.
There was a flash crash down to ~$104K that wiped out leveraged traders. Liquidation cascades are relatively uncommon and the last one was in 2021 IIRC.
it happened really fast so a lot of positions were liquidated automatically by force, rather than voluntarily by the user. that's really the main distinction
These things happen when too many participants are leveraged... Not that I feel sad for them. They took a gamble where sometimes they do lose...
It's not really bitcoin but the huge alt coin market much of which dropped 60%+ in just two hours.
The wild moves occurred on alt coins, some went down 80%. Mr. President's own World Liberty Financial for example went down from 18c to even 6c in an instant.
That too seems like business as usual though?
Not really. It was the biggest such crash ever.
For long-term holders, this hardly matters.
The real story here is insider trading and corruption by people close to President Trump, who knew, down to the exact minute, when to short BTC and ETH.
BTC, meanwhile, being a scarce asset, will recover as fiat supply increases with time.
Is insider trading even illegal with bitcoin?
Insider trading of Bitcoin is illegal under CFTC regulations. It won't be enforced because crime is legal though.
This President, too, will pardon his son and the rest of their family. So, it doesn't really matter if it's a crime or not.
Nowadays many like 100-1000× leverage, with no real stoploss strategy and with significant portion of their capitals.
The pump of ZCash also prove some like to clean their history (nowadays that Monero was attacked to crash Houthis international trades).
It's business as usual for those who know the business, many are newcomers.
Yeah, the commotion is a bit silly. "The crash" basically brought the price of BTC to the level it was comfortably at two weeks ago.
I think disproportional media interest in last two weeks of appreciation and "the crash" is a failed attempt to finally kickstart this BTC bull or bear market. Somebody is getting impatient with last two years of steady growth.
https://www.cryptopolitan.com/hackers-used-binance-to-crash-...
Binance statement: https://www.binance.com/en/support/announcement/detail/0989d...Shocker. At least tulip bulbs could be planted.
Fun fact: they're edible too
> In addition to the rationing system, the government provided food through soup kitchens in the cities. As the intensity of the famine increased, the reliance on soup kitchens increased. In April 1945, 1.8 million people in the cities were served daily. One pint of soup per person was the normal ration. The quality of the soup deteriorated over time and some people considered it inedible. The caloric content of a soup ration diminished from 483 calories to 268 calories. The soup served was often made from sugar beets, tulip bulbs, and potato peels. Pet dogs and cats were sometimes eaten.
https://en.wikipedia.org/wiki/Hongerwinter
Way of topic but quoting the hongerwinter as a 'fun fact'....
Wow...
Just give us a date/year/etc in which you think the value of bitcoin will go to zero
If you are unable to do that, then you implicitly agree, as pretty much everyone does now, that bitcoin has an intrinsic market value that will remain over an indefinite time horizon
> Just give us a date/year/etc in which you think the value of bitcoin will go to zero
So you can take advantage of the market? No way, only insiders are allowed to do that.
I could change your question: Do you think possible that the value of bitcoin will go to zero?
If yes, you implicitly agree that it's fueled by speculation and a Ponzi scheme that needs a constant influx of fresh, if boring, fiat currency.
No, I don't think bitcoin could go to zero- hardly seems like a rational opinion at this point to think it could go to zero (short of a human extinction event, or near-extinction event, or some other extremely remote abstract theoretical scenario)
How about near-zero? It has had a Damocle's sword hanging since inception, in the form of massive, unused (yet) stashes of bitcoin. It's value is in part propped by the hope of those stying unused.
price != value
Yes and: Food.
A captain, back from a long voyage, therefore oblivious to the bulb bubble, received his payment served on a plate, then proceeded to eat it.
a13z's continued insistence that bits of data are in fact a "digital asset class" just slays me.
To play Devil's advocate, regular finance is mostly bits as digital assets. Banks can't turn them into money without going bankrupt. A sizable chunk of the global economy is electrons and ideas.
To parallel with videogames, the dominant game of capitalism has been captured by a small group of griefers using glitches and exploits to win.
The funniest thing is that BTC is 100k EUR +-5k for some time now and appreciating very slowly and linearly (at the rate about +300% over 2 years).
If you see BTC rising faster when you look at its price in dollars you don't see the appreciation of BTC. You see the decline of the dollar.
Thought i was the only one noticing that , people celebrating the rise in dollars they get for it. Then i check the euro price and it hasn't budged.
And it's not like the euro hasn't been inflating..
Is there anything people can actually use to see what's going on ? Gold? eggs?
The article doesn't really explain what happened but a lot of the alt coins were bought with borrowed money. When Trump announced the latest 100% tariffs on China the selling caused a lot of alt coins to fall such that traders were stopped out and their coins sold which caused more drops some as much as 99% in a few minutes. Then things bounced back.
There is a thread on X which unravels the short trade placed hours before Trump's statement and linked it to an individual from Hong Kong
https://x.com/eyeonchains/status/1977071983172231507
The day Trump announced the tariffs, someone placed an US $100M bet that crypto would crash thirty minutes before the announcement.
They made nearly US $200M profit. Someone in the Trump admin is cashing in, and it's not the first time this has happened.
"Miscommunication" is when you see mineral water on the bill when you thought it was tap water. Being that ignorant of the positions during a trade war that you started and doing it in public on Twitter is more like holding Uno cards face-out during your own game of poker.
> Amid the market's downturn on Friday, our view was that the 100% tariff announcement by Trump was a bargaining chip.
> After China's statement last night, we believe the odds of Trump's 100% tariff on China going into effect are extremely low.
"Does nothing, wins" is getting a bit out of hand: they're going back in time and winning 26 hours before they even start.
How could I be able short bitcoin at this point? Asking genuinely but not too seriously.
Google "ETF short bitcoin". There are some you can just buy like any other publicly traded ticker.
Just remember, the market can stay irrational longer than you can stay solvent.
CME has futures and micro futures.
Why does "orange guy doing random thing" cause Bitcoin to go down in value? I mean, whatever the random thing was, it seems to have nothing whatever to do with Bitcoin.
Because Bitcoin is far, far more correlated with the stock market than the proponents want to admit. Notice that gold didn't budge, "digital gold" my ass.
When folks get scared, pure speculation instruments like BTC will tank.
Gold has intrinsic value. Bitcoin are just... bits.
Isn't money just bits too nowadays?
As far as I understand, Bitcoin is backed by energy and scarcity, much like gold: it requires significant energy to "mine" a Bitcoin, and it can't be easily duplicated, if at all. That's its intrinsic value, unlike fiat currencies that can be printed easily (correct me if I'm wrong).
I also believe that even gold has little intrinsic value, perhaps even less than steel. Ultimately, it's really a question of how valuable something is as a medium of exchange. Bitcoin is durable, portable, divisible, scarce, verifiable, and decentralized, which makes it a valuable form of currency. I suppose that's its exchange value.
> Bitcoin is durable, portable, divisible, scarce, verifiable, and decentralized, which makes it a valuable form of currency
I think for it to be a currency it has to be accepted for real world products? A currency is also useless if it fluctuates this much because you cannot set prices for anything.
By your logic stocks would be a currency?
A security is what it is at this point
Money is bits, but the government (depending on where you live it is different governments) says you can use it, and so it is backed by the law.
If that is good or bad is an open question.
Indeed, it must have legal value. Even so, some stores accept Bitcoin and Monero (thus making them money) but won’t accept USD in Europe or Euros in the US, so you can't use them despite those currencies having legal tender status.
So yes, whether Bitcoin is money or a security remains an open question.
>Bitcoin is backed by energy
Uh that energy is spent though, transformed into heat , you can't reverse all that hashing and have the computer emit electricity.
Isn't it the same for all mining activities, including gold? You typically spend a massive amount of energy digging and processing earth to recover a few grams of gold, and that energy isn't recoverable.
Gold's "intrinsic" value is limited to electronics contact plating and a comparatively small ("one tech company" worth of revenue) global jewelry market.
Gold's perceived value may be higher, but that's only because it's perceived, incorrectly, to have "intrinsic" value.
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Gold fell on Friday and recovered over the weekend. BTC certainly remains a more speculative asset than physical gold, but the comparison is not as unhinged as you make it sound.
Gold is the, uh, gold standard of safety bets and has run up lately to due comprehensive craziness around the world and especially in the US.
How is BTC not the exact opposite of gold? It has no fundamentals whatsoever, no uses outside its transactability, and is widely used to speculate.
> How is BTC not the exact opposite of gold?
If BTC is the exact opposite of gold, it follows that Eth, Ripple, USDC, etc are all more gold-like than BTC. I'd be interested to hear why you believe that to be true.
BTC is a coin with longer investments and does not fluctuate as much as other cryptocoins (by %). It has a known supply (past, present and future) and predictable mining rate. It has a known finite future supply cap.
To be clear i don't believe BTC is a perfect gold analog. But if you have to pick the "most gold-like" digital asset, it would make my short list.
The same psychological forces that drive the stock market drive crypto. It used to be fairly disconnected, but that ship sailed long ago.
At a logical level, Bitcoin should be decorrelated from stocks. The fundamentals of Bitcoin network adoption and utilization are largely separate and independent.
But, at an emotional level, Bitcoin is considered a high-risk asset. So, whenever fear gets heavy in the fear/greed equation, Bitcoin is one of the first places people pull money out of as they flee to safety. It's also the "High Risk-High Return" spot for folks to plunk their "spare change" when they are feeling safe. So, in practice short term moves in Bitcoin are highly correlated to short term moves in equities.
Meanwhile, if you actually run the numbers, Bitcoin has out performed the SP500 (or even the SP10) by a large multiple over the past decade while having a volatility usually around the median of the SP500-top-10 that everyone is currently betting heavily into. People just have a hard time getting out of linear thinking and so they look at the big dips as short-term linear disasters while on a long-term, logarithmic view they have been rather boring. https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fd...
> At a logical level, Bitcoin should be decorrelated from stocks
I don't see how you get to that logic. BTC is a speculative growth asset held by the same people who speculate on securities, and for the same reason. In fact by virtue of being "pure" speculation, it should be expected to be even "stockier" than stocks! You don't buy bitcoin to influence corporate governance or derive dividend income. The only reason anyone purchases crypto is to sell it later at a higher price.
So if you need to dump an asset to backstop other debts, it's going to be your crypto wallet you reach for first. It'll crash harder, almost by definition.
There are at least two reasons to buy Bitcoin:
1. You need it for use as a collateral asset for smart contracts. There are no crypto cops or crypto courts. Only collateral gives contracts teeth. There are many options here. Just like there are many options for collateral assets in traditional finance. But, BTC is the top dog for the role and the first choice of individuals and institutions trying to lay down the foundations of decentralized finance.
2. You are speculating that the growth of BTC's growth in value as a collateral asset will outpace the growth of other assets. This as played out well over the past decade.
> I mean, whatever the random thing was, it seems to have nothing whatever to do with Bitcoin.
I recently reviewed my investments and wrote about it on my blog, curiously around the time when US announced its tariffs around April, pretty much everything dropped, including crypto like BTC and ETH.
I guess because it's random things that cause anything to go up or down nowadays, so it fits.
From what I’ve read it’s because there is a massive amount of Chinese investment in US equities and crypto markets.
there were a couple of reasons
1) there is a lot of circumstantial evidence of insider trading before the timing of presidential tariff announcement. further the accounts that traded on hyperliquid DEX were funded 24hours before even the first tweet by the president indicating fore-knowledge.
2) crypto exchanges have a feature called auto-deleveraging which closes long and short positions to 'preserve the solvency & integrity of exchange'. apparently this got kicked in when some of the thinly traded coins just didnt have a market maker & basically floor fell out of price.
3) looks like some screwup happened (likely intentional unknown atm) with the price reporting oracle between decentrralized exchanges like hyperliquid and Centralized exchange used (binance). people are claiming intentional sabotage by binance because they have a competing dex called aster. who knows.
4) leverage play, everybody was levered up because of up-tober expectations. so even small movements wiped out peoples saving.
Here's more speculation that the price manipulation was rife:
https://x.com/ElonTrades/status/1977340254047649966
As many assets are held by leveraged players their prices crash when it's difficult to secure future loans at the same price. This is why seemingly random things like central bank of Japan raising rates can cause double digit crash on Nasdaq.
There is nothing to worry about if you are happy to hold the assets long term. It's an opportunity if you have spare cash. It's only a problem for those leveraged players and people who need to sell right now for whatever reason.
There is a prevailing myth that crypto is somehow above or immune to governmental actions. Nothing could be further from the truth.
The US government could mostly destroy the crypto market tomorrow with a policy change. That's all it would take. If the US government came out and said to access SWIFT and the US financial system, any financial institution is not allowed to trade fiat currencies to or from crypto currencies then that's it, it's over.
The real problem with crypto is the biggest proponents of it simply do not understand the financial system. In fact they're almost the opposite: they're proud of their ignorance. They wear it like a badge of honor, like it lets them be a better disruptor. Sometimes, that's true. But for those of us with some understanding of the financial system, we just shake our head as the crypto market relearns the lessons already baked into the financial system.
Here's another myth: currencies were never backed by gold (or silver). The US Dollar has never been 100% backed by any metal. What really backs the US dollar is the US military. Yes, we previously had a soverign promise to exchange dollars for gold but that's just a promise. We saw under FDR how that promise can simply be changed when there was a sovereign currency devaluation.
While I mostly agree with you...
>The US Dollar has never been 100% backed by any metal.
This is not accurate but the devil is always in the details. What exactly does "backed by" mean? If we mean pre Bretton Woods (1971), then, for all intents and purposes it WAS backed by Gold, not just a promise. The federal reserve could not conjure up fiat dollars on theirs (or anybody else's) whims and fancies.
Pre-1971 US dollars could be freely traded/swapped for gold at any bank at the then rate of 1oz of Gold = $35. This was written in stone.
Of course, then Nixon did what he did in 1971, and as they say the rest is history.
p.s. The Bretton Woods Agreement/system/whatever you wanna call it, came into being in the aftermath of WWII, in 1944. This was [1] essentially an agreement that those 44 countries will use the US dollar (and by correlation, the USD<->gold peg) as long as the (US) powers that be didn't fuck it up.
p.s.2 - A lot of people don't realize that these accords were what established the IMF, and the beginning the World Bank, BIS etc.
So, what happened in 1971 and what did Nixon do?
"On August 15, 1971, President Richard M. Nixon announced his New Economic Policy, a program “to create a new prosperity without war.” Known colloquially as the “Nixon shock,” the initiative marked the beginning of the end for the Bretton Woods system of fixed exchange rates established at the end of World War II." - per US Office of the Historian.
So, yes, things can change due to government actions, and yes Bitcoin and its peers could be rendered worthless in a heartbeat, if the power that be want it.
>What really backs the US dollar is the US military Agreed. But as always there's a time factor. This was true around that time, but not so much today in 2025. While the European military assets are not worth talking about, China and Russia both have continued developing those assets and do present an equalizer today. Are they equal to/better/worse than the US military is somewhat of a moot point. They exist. That in itself is the point.
[1] - The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia,[1] after the 1944 Bretton Woods Agreement until the Jamaica Accords in 1976. - As per Wikipedia.
It was generally understood by 1970 that the US didn't hold enough gold to fulfill the promise. You as a normal person couldn't go to any bank and get 1oz of gold though, only other countries could do that and they didn't in large amounts and so it worked out despite there not being enough gold in the US.
In the 1800s 1oz of gold was tradable for $20. The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable)
$1 used to be tradable for 1oz of silver. since silver and gold have different supplies though sometimes you could (in the 1800s) make a lot of money from this.
> The $35 figure was already accounting for some inflation despite the backing (I don't recall the year it changed, but sometime in the 1930s seems reasonable)
January 31, 1934. But first the US Treasury took over the US gold supply from the Federal Reserve.
Other than working in the financial industry, is there a way to really understand it? There don't seem to be many credible sources (at a level deeper than the WSJ/Bloomberg).
I don't think you need a deep resume in the financial industry nor a long education to be better off than most of the population. Those things can help for sure.
But financial literacy comes really from media literacy, asking basic questions of who is telling you something, what is their track record, who are they paid by, what are they selling and what other people say about what they say. Too many people simply react to emotions and look for confirmation bias. Also, one needs to distinguish between analysis and justification.
There's opportunities for this every day. It can be as simple as asking what a bank does or how mortgages work. You'll quickly get to a point of asking what fractional reserves are, what the FDIC does and how the government keeps banks solvent.
You then look at what a currency is and how currencies have evolved over time. The early history of currencies can largely be derived from first principles.
Example: in primitive societies, people migrated and followed food. As time went on they'd start to specialize and have excess goods and you'd end up with barter systems, even more so once you had agriculture and you started to see permanent settlements. But bartering is inefficient. You might have the leather that I want but you don't want the cheese that I have. Maybe you'll take it because you can trade it, maybe not.
So people started trading in things that they assigned value to eg silver and, later, gold. It's important to note that this value is "assigned" because, beyond jewelry, gold didn't have a lot of early utility. It has useful properties, like it's inert, fungible, divisible and hard-to-counterfeit (because of it's density).
But dealing in gold itself is awkward so political entities started creating currencies. There were IOUs and contracts but currencies eventually became a promise to exchange it for gold, if requested, by some political entity.
And this really takes us into the 20th century where countries issued currencies and they backed those with gold reserves, literally thousands of tons of gold.
It quickly gets a lot more complex from there as 50+ years ago we ended up with fiat currencies, meaning the value is set by markets instead of an agreed upon exchange rate.
You have people who think abandoning the gold standard was a mistake, often called "goldbugs". Many goldbugs moved to crypto. You can see why: the idea is that the supply of Bitcoin (or whatever) is predetermined. You can't just "print money" (they say). The truth of printing money is more complex. A big problem is the US consistently runs a trade deficit.
I'm not sure how helpful that all is. Just some random thoughts.
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While it's fascinating to watch crypto bros learn exactly why the financial system is like it is, kinda like the kid eating baking chocolate, that's boring. It happens basically every day.
What's more interesting is how massive hte insider trader problem is already and it's only going to get worse. At some point it's going to undermine the financial markets themselves because nobody is going to trust it. Libertarians might get mad but financial markets, like all markets, require strong regulation to function.
A consequence of the presidential immunity decision is that Trump and his orbiters are allowed to insider trade with absolutely no repercussions. If somebody in his orbit does get in trouble, no problem. Just sell another pardon.
The US control and influence over the global financial system is a key pillar of its global power. As much as we might hear platitudes like "America First", this administration has done more to destroy the global power and influence of the US than any in living memory and it's not even close.
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Biggest crash in the history of crypto. I'm surprised this isn't on network news.
A lot of the value was wiped out from non-Bitcoin, and the percentages weren't the biggest, only the absolute value.
>Biggest crash in the history of crypto. I'm surprised this isn't on network news.
In dollar terms sure, but it's a meaningless blip percentage wise. The NASDAQ shed more than its entire market cap in the 2000s this year in a few days and it went right back up. We are in a fantasy world where numbers don't mean anything anymore.