Bitcoin

Tether Issued Another $20M Token as BTC Price Showed Signs of Weakness

JP Buntinx | November 8, 2017 | 1:00 pm
Tether
Bitcoin

Tether Issued Another $20M Token as BTC Price Showed Signs of Weakness

JP Buntinx | November 8, 2017 | 1:00 pm

Tether is one of the most remarkable companies in the cryptocurrency space so far. Their business model revolves around issuing digital tokens pegged to fiat currency. Especially the USDT token is often used on cryptocurrency exchanges. Big was people’s surprise when the company introduced another 20 million USDT out of the blue. This move coincides with the Bitcoin price retracing over the past two days. It is not the first time we see these “coincidences” become apparent either.

There have been some questions regarding the behavior of Tether as of late. All of their digital tokens need to be backed up by the same amount of fiat currency. According to their latest financial report, things seem to add up. That was somewhat surprising, considering the company issued a few million new tokens in the same period. At that time, some people assumed it was done to prop up the Bitcoin price. Whether or not that is the truth or not, remains to be determined.

More Suspicious Behavior by Tether

Just last night, another 20 million USDT were brought into circulation. Once that happened, the Bitcoin price immediately recovered by $150. All of this seems to be somewhat “too convenient” to be a coincidence. Then again, if the financial statements add up, there is nothing to be concerned about. The bigger question is why these “cycles” seem to repeat itself during times at which the Bitcoin price is struggling. Right now, the price has recovered most of its losses sustained over the past 48 hours.

All of this makes Tether look pretty suspicious, to say the least. Moreover, Bitfinex isn’t entirely without blame in this regard either. Both companies seem to be working together quite well in an effort to pump the Bitcoin price. Creating artificial demand and trading volume isn’t an acceptable course of action, though. Sooner or later, things will effectively fall apart. Bitfinex will exit the US market very soon as well. There are far too many coincidences to think this is not coordinated in one way or another.

Rest assured a lot of people will keep a very close eye on Tether moving forward. There are a lot of concerns regarding their company and the rate at which they issue USDT these days. While it may be doubtful we will see another Gox affair, things aren’t looking that positive either. It will be interesting to see how all of this plays out in the coming weeks and months. New USDT in circulation always leads to a Bitcoin price push. It may be a coincidence if you believe in that kind of thing.

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  • Artois

    Screw off with your conspiracy theories

  • Alex Thorn

    As the price goes down, people sell BTC for USDT. It only makes sense therefore that more USDT needs to be issued when the price of crypto drops. Don’t get me wrong – I want to see more verifiable auditing of Tether’s holdings (as well as the removal of that absurd “your USDT is NOT exchangeable for real dollars” language from their customer agreement), but the logic behind this anti-USDT mania doesn’t seem sound to me.

    • Jonathan Silverblood

      If they issue more USDT to keep the price of USDT in-check so it doesn’t become too valueble, then they are either not backing it up in their reserves properly, or they’re effectively using funds (USD, not USDT) to buy up to catch all the falling knives; OR they are trading fictional value created out of nowhere (USDT) for real value (crypto).

  • Jonathan Silverblood

    there isn’t, but hazard a guess for me, then go look it up:
    Which trading pair has the larger market: USD/BTC or USDT/BTC?

    With regards to other things being sold to see an increase in tethers, that’s only if you look at the order book. If you look at the contract on omni which CREATES tethers to begin with, there is no counterparty other than their promise of valid reservers, which we are unable to audit on our own (despite them vehemently claiming we can, simply by looking at their website page for transparancy)

    • CryptoJoeAnon

      Yep what is even more concerning is how Blockstream and Shapeshift are shareholders in Bitfinex. https://twitter.com/Blockswater/status/778324389146263553 Which could explain why none of the core people or people from shapeshift have addressed the tether issue publicly. The only person who has addressed the tether issues is Jeff Garzik who I have begun to trust a lot more than core/blockstream

      • IP-Daily3x

        The case against tether seems to be intensifying. Playing devils advocate; is it possible the money is actually there, or at least the exchanges are good for it? I find it hard to believe that these large exchanges are aware of liquidity issues and arent at least quietly trying to phase it out. No expert, but someone mentioned that when an asset is backed by the dollar, it then becomes a security in the eyes of the US government(and other governments). Is it possible that the Tether is backed up, but that Tether and these companies are just trying to distance themselves from government over sight and prosecution. Hence, why bitfinex banned US citizen’s.

        Is it also possible that people are just using USDT to on ramp into cryto? which is why the quantity would increase?

        What did garzik say?

        • CryptoJoeAnon

          Yeah Garzik did talk about tether and warned people about it but he’s not part of Blockstream which is why he’s one of the few people in the space I still have some respect for. I supported NO2X but now that I’ve read more about blockstream I kinda wish Segwit2X had gone through since it would have gotten rid of blockstream’s control of development. I just don’t like companies trying to control bitcoin which is why I don’t support bitcoin cash either cause Bitmain has too much influence on it’s mining

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