The Tether issue keeps coming back to hunt BTC price valuations.
It is not only nostr:npub1a2cww4kn9wqte4ry70vyfwqyqvpswksna27rtxd8vty6c74era8sdcw83a ´s "FANS" who simply repeat the meme to trash on her excellent book without having read a single word of it, but also competent and qualified people like Doomberg on a recent Whatbitcoindid show who keep raising the issue.
https://www.whatbitcoindid.com/podcast/the-breakdown-of-trust-with-doomberg
Regardless of whether Tether is fully backed or not by USD (which issue we cannot solve but only trust the evidence provided by Tether), its impact on the BTC price is however an issue that must be dealt with in practical terms. Since I believe it is either neutral or a net positive for the BTC price in the long term, this must be finally classified as FUD once and for all.
Shall we? Let´s see:
- Tether creates 1 million USDT not backed by USD.
- 1 million unbacked USDT flows into BTC and raises the price from say 20.000 to 25.000
- The creator of unbacked USDT now wants to cash in and sells BTC at 25.000 bringing down the price again at 20.000
The point is, whatever amount of fiat flows into BTC fixed/inelastic supply, whether fake USDT or fake fiat USD, whether printed by Tether Corp or by the FED, it only increases the price of BTC momentarily until the same amount exists and is converted into fiat again. Therefore it can only be a short term price manipulation which may generate a profit for the manipulator if his buying into BTC is strong enough to create a bubble and FOMO effect to induce exponential buying from other peoples to whom he can sell before the price come back down again. But when he exists the position the same will happen to the downside. Therefore it is irrelevant/neutral for the long term price of BTC as soon as the manipulator is replaced by new demand for BTC.
Otherwise your "fan" has to assume that there is an infinite creation of unbacked USDT or fake fiat which is flowing into BTC to sustain its price ad infinitum, which is clearly not the case.
Or, last but not least, the opposite may also happen: those holding unbacked USDT rush to the doors trying to convert USDT into fiat USD. Since there is not enough fiat USD for all of them the effect is the classic bank run. Tether goes bust, the idiots holding USDT lose their shirts and their underwears and the smart ones flow into BTC for safety supporting its price.
Either way, it is either neutral for BTC price or a net positive.
OR AM I MISSING SOMETHING?? Constructive thoughts are highly appreciated.
#bitcoin #tether #usdt #usd #whatbitcoindid
nostr:npub1pyp9fqq60689ppds9ec3vghsm7s6s4grfya0y342g2hs3a0y6t0segc0qq nostr:npub15dqlghlewk84wz3pkqqvzl2w2w36f97g89ljds8x6c094nlu02vqjllm5m nostr:npub1cn4t4cd78nm900qc2hhqte5aa8c9njm6qkfzw95tszufwcwtcnsq7g3vle nostr:npub1s05p3ha7en49dv8429tkk07nnfa9pcwczkf5x5qrdraqshxdje9sq6eyhe nostr:npub10vlhsqm4qar0g42p8g3plqyktmktd8hnprew45w638xzezgja95qapsp42
