10/12 ANDY HOFFMAN (CryptoGoldCentral.com): Problems With Tether? Who F---KING Cares!!!!
The Great Bitcoin consolidation of 2018 continues – with the Hoffman Line (a $100 billion market cap) providing rock solid support despite every possible attempt to break…or even approach it. The latest being YET ANOTHER bout of FUD regarding Tether, the cash substitute created by the Bitfinex crypto exchange to circumvent money transmission regulations in major Western nations.
I’m not going to rehash the ongoing saga of Tether, the “cryptocurrency” invented by Bitfinex in 2015 to enable investors to hold “cash” in their crypto brokerage accounts – that as of today, has a market cap of $2.7 billion. Pegged to the U.S. dollar, it is supposed to be, like money market accounts, priced at exactly $1.00. However, due to liquidity issues, and an increasing fear of accounting improprieties, it trades at a 1%-2% discount to the dollar at most exchanges.
Earlier this summer, an independent audit confirmed Bitfinex does in fact have funds backing its Tether issuance, but the market continues to fear that something is indeed wrong - which is unquestionably fostered by the relentless attacks, based in large part on detailed research, by the anonymous Twitter handle “Bitfinex’d.”
https://cryptogoldcentral.com/2018/06/20/tether-deposits-are-backed-by-dollars/
https://twitter.com/Bitfinexed
Wednesday night, the crypto market plunged yet again due to fears of a Tether collapse, as evidenced by a further increase in the discount to the $1.00 peg. The reason being, that apparently Bitfinex had funds at a Puerto Rican bank (Noble) that went bankrupt. Bitfinex claims to have removed all funds from the bank, and it was rumored they replaced Noble with the Hong Kong banking giant HSBC.
It was later reported that the HSBC partnership was fake news, but Bitfinex claims to have withdrawn all funds from Noble - and demonstrated it was in fact solvent. However, Bitfinex has temporarily suspended fiat deposits, and the Bitcoin premium versus other exchanges has exploded higher – presumably, because investors are buying Bitcoin on Bitfinex to make sure they don’t hold Tether in case it implodes…
https://cryptonewsreview.com/bitfinex-suspends-fiat-deposits-amid-rumours-of-hsbc-withdrawal/
…that on yesterday’s Audioblog, I asked why it would matter whether one held Bitcoin or Tether when the EXCHANGE was the problem (in other words, exactly what happened at Mt Gox).
That said, the key issue is that Tether is NOT Bitcoin – and as yet, I have not heard a logical explanation why problems with Tether (including the worst case, of a Tether and/or Bitfinex collapse) matters a whit to Bitcoin’s outlook.
https://twitter.com/Andy_Hoffman_CG/status/1050706870975877120
To that end, @WallStrWhales put it perfectly this morning, in discussing how yes, it could be devastating for the altcoins that depend upon Tether liquidity for demand…but NO, Bitcoin demand would not be impacted in the slightest. In fact, a Tether implosion would likely benefit Bitcoin, in terms of its “dominance” versus altcoins.
https://twitter.com/Andy_Hoffman_CG/status/1050713818278424577
This is what I opined in January and June - and what I’m reiterating, more strongly than ever, today!
https://cryptogoldcentral.com/2018/06/21/tether-ridiculously-risky-but-not-printedor-a-bitcoin-risk/
So, for newbies, “traders,” and the overall clueless, you’re welcome to spend time fretting about Tether and Bitfinex – and make STUPID decisions, like selling your historically undervalued Bitcoin. However, if you’re wise enough to merely HODL Bitcoin on Trezors – using exchanges ONLY to purchase, but NEVER to store – relax, and wait for the inevitable…perhaps, imminent…BTC price explosion.
The Cal Ripken of crypto blogging.