I'm baffled a bit that people are not outraged at what obviously reeks of bovine excrement here. I mean, most know that tether, or TUSD as it's normally found on exchanges, has had some dubious beginnings and lifespan. From the complete denial of ownership by Bitfinex on it's early days, to it's mysterious presses who have been speculated to have caused many pumps.
But, the audits
As far as I know, they never happened, not really. In other words, they had some internal verification, but nothing was ever disclosed publicly, which basically makes them meaningless. On top of that, the firm who was in charge of said activities retired prematurely from the task.
It's important to point out the reasons as to why Tether exists in the first place, and how it was been built. Maybe until just recently we still had plenty of people who believed, naively so, that there are still ways of cashing out to FIAT using Tether, but there are plenty of articles out there removing smoke from these doubts, and as you might guess, it's ugly.
However, what's more important to understand is that it was really built to circumvent regulatory challenges. Plainly said, Tether today exists outside of "law" and hence can't be regulated by american entities or otherwise.
One would imagine that this alone would give cryptocurrency investors enough reasons to stay away from the token, but as with many things on crypto, rationality does not rule.
The magic presses
The analogy of the printing press is very fitting for tether, and honestly the evidence, so to speak is plain for everyone to see. Almost without exception any big rally of BTC has been triggered by the printing press, the sudden introduction of enough tether to blackmail any politician in a short span of time.
The chart that accompanies this publication tells a story that we would be naive to ignore. At first glance we might be too quick to dismiss it, explaining the expanding marketcap with the sudden spike on BTC valuation, but that simplistic explanation is not sufficient to anyone who gives this more intense thought.
Did Tether/Bitfinex secure more backing, more vaulted USDs to emit the Tether to match those spikes? Could they even be able to do that at such short intervals? Is there even a way to know? Questions that as of now, I can't seem to find satisfying answers to and I'm sure there are none.
The mysterious insider?
There has been a very peculiar account roaming on twitter for a while, bitfinexed. Nobody knows who this person, or group of people are, but some of the things they've revealed have turned out to be true in the long run.
Of course, it could be all coincidence, or even simple analysis and logical predictions. After all, it does not take much thinking to cross draw some lines on this whole situation and speculate negatively as to the reasons why things are the way they are.
Curiously enough, even Dr. Doom has found himself an interesting ally in his call for the end. Now, don't misunderstand me, it does not seem that Bitfinex is anti crypto per say, but just someone or someones, who really and emphasis on really dislike Bitfinex and it's controversial product Tether.
If you are someone who likes to dig deep into things of this nature, and possibly catch some canaries inside the coal mine, bitfinexed is an interesting account to be following on the twittersphere.
The recent FUD and a new magic trick
Many articles have been written on this matter already so I won't go much into the details, but it might be enough to say that a new round of fear has made it's rounds. These rumors signaling the end of Tether and Bitfinex the parent company, called into question their liquidity and some banking issues they seem to be having with HSBC.
What's important about this whole ordeal, at least to me, is that the FUD created a spike on BTC, dropped Tether below its peg and shook the markets enough to even spark the introduction of new stable tokens. Entering the ring now is Huobi, Coinbase, Gemini (this one had been in the plans for a long time, but the timing is somewhat convenient), and I'm sure many more will come as well.
One would think that if more people exit their Tether positions, keeping the peg would be difficult to say the least. The downward pressure of sellers would sure make it challenging. So, how can it be done? How can Tether hold it's peg against the wall of red?
How about reducing it's circulating supply, you say? Sure, that seems like a neat trick, but what are the logistics of such a move? In theory, or at least to be economically sound, destroying Tether tokens should be accompanied by the withdrawal of the dollars backing the currency. In other words, if you break the tether itself, the 1 to 1 backing, then the whole "white paper" (note the air quotes) would flap. But, it seems like it's only a handful of people who are even contemplating this problem.
If you notice the chart shared above, what has really been happening is actually a bit comical. The tokens are just being removed from circulation and that's the end of the story. This gives the whole concept of manipulation a whole new meaning, and I for one can't find a single silver lining here.
So what's going to happen?
I don't have to be bitfinexed's best friend to guess and I don't think it's up for debate anymore. There is absolutely no way Tether will last for a long time, it just can't. In truth, the more they keep on pulling these magical moves, the more trust they lose and the more people will exit their long term positions, understandably so.
When it will happen, I'm not entirely sure, but It can't be long. I speculate that the creation of these new stable tokens are the signal many of us have been waiting for, the ending of the gag, so to speak.
Now, I honestly believe that this won't really hurt crypto a whole lot and that those of us who have set our flag on this mound should not worry much. Long term many projects will fail, and those who are acting clumsy, compromising trust in the way, will probably be weeded out sooner than most.
This is not financial advice, it's just an opinion. But, I would never suggest anyone to entertain holding on to Tether, at least not long term. It's obvious there is something in the water....
