Tether’s days are counted – whether by natural implosion, or as a result of regulatory action, the stablecoin funding a wide array of offshore crypto activity will go the way of the dodo.

As is customary in the world of crypto, retail holders will pick up the tab. Offshore traders and DeFi yield farmers will get wiped out. Regulated exchanges won’t collapse overnight, but they will suffer from lost business as people stop buying Bitcoin as an on-ramp for offshore activity, and also from retaliation from regulators.

Tether’s stablecoin USDT is mainly used as a tool for offshore funding. The proceeds of each USDT print are sent mostly to offshore exchanges:

USDTs are mostly used as collateral for margin trading, and for stacking (or “yield farming”). Yield farming is far less reliant on USDT, but it’s still advertised as one of the ways to get eye-watering returns without price risk. With advertised “expected returns” ranging anywhere from 10% to 50%, it happens almost exclusively on unregulated platforms, and the source of returns is… unclear to say the very least. In the real world, anything beyond a 5% ARR reeks of horrible counterparty risk and probable default. In the land of decentralized finance, where intermediaries don’t have to perform credit checks or comply with regulations, and where the value of your collateral goes up everyday, everything is supposedly possible (until it isn’t).

Yield farming in itself deserves a series of posts. To give you an idea of the stampede that it is, have a look at the volumes:

All this pile of crypto “value” is locked away in smart contracts, reducing supply and propping up prices. These smart contracts have varying levels of security, and not a week goes by without a new exploit being announced, and “yield farmers” losing tens of millions of funds to hackers. But because returns are so high, nobody cares for now.

USDTs look like real money to users because exchanges and arbitrageurs maintain a peg to the dollar – the price of every cryptocurrency is the same for USD as for USDT. However, USDTs come with a very important caveat: their apparent value relies exclusively on trust and hope that this peg will hold. There are no guarantees that USDT will be worth anything tomorrow – which is a pretty sweet deal for exchanges who keep the balances of their clients in USDT, instead of USD. If Tether collapses, it’s the users who will get shafted, not the exchanges.

The use of USDT has thus divided the crypto ecosystem in two separate worlds: one “regulated”, the other – a crapshoot of YOLO gambling disguised as “investments”. A simplified view of this ecosystem:

Notice how PayPal and Robinhood have chosen to isolate themselves from the rest of the ecosystem, not allowing their users to withdraw their crypto? They know allowing outside transactions is a ticking time bomb, and they want no part in the blame game that will happen after the collapse.

Tether can collapse in two ways:

One USDT isn’t worth one dollar. It only appears so, because exchanges – both on-shore and offshore – have an economic interest to maintain the peg.

Because USDTs are used as collateral for leveraged trading, offshore exchanges need to maintain its value or risk a cascading liquidation event for the positions of their clients. Regulated exchanges have an interest to keep the prices of crypto quoted in USD in line with those quoted in USDT, because if the prices quoted in USDT are higher, everyone will understand that USDTs are worth less than USDs, and offshore exchanges will collapse. And because on-shore exchanges serve as on-ramp for offshore leveraged trading (and gambling), they have an interest in keeping the flow going. Moreover, as USDTs are used to pump Bitcoin up, onshore exchanges also benefit from the increased interest in crypto as people buy to HODL.

Because of this alignment of interest, USDT is able to set the pace for the whole ecosystem while only controlling a part of it – quite like the Willy Bot managed to pump up the price of Bitcoin everywhere, while only being active on MtGox.

However, the moment insiders realize USDT’s game of musical chairs is coming to an end, the two sides of the crypto ecosystem will turn from friend to foe in a second. Actors on the USDT side have little access to banking, and their only way of cashing out is to buy a liquid crypto currency (like Bitcoin), and transfer it to the regulated side, where it can be sold for real dollars, instead of a collapsing USDT. We’ve seen this pattern in 2013, when the price of Bitcoin on MtGox shot through the roof as people tried to buy it and transfer it to exchanges that weren’t bankrupt. Expect the same to happen again, with Bitcoin priced in USDT going to the moon, while Bitcoin priced in USD is crumbling.

When offshore players realize the gig is up, they will disappear with their customers’ crypto. Bitcoin won’t collapse to zero, because a large number of people won’t be allowed to cash out, their coins getting stolen. These coins will slowly get back on the market over the next few years, as a result of successful lawsuits (just like for MtGox), or as insiders who disappeared with their customers’ funds slowly come back out of hiding and try to cash out while keeping a low profile (just like for fraudulent ICOs).

Regulated exchanges will try to cut themselves off from the collapse. They’ll suddenly start to care a whole lot about KYC and AML. Coinbase won’t touch Bitcoin that’s been on Binance’s wallets with a ten foot pole. But regulators will come after them nonetheless, as the public outcry will be just too great. A lot of people will lose everything, and with crypto having gained an air of credibility with official, trusted outlets like Bloomberg, Reuters or CNBC covering it in a legitimate way, the outrage will be justified.

For the last 10 years, this cycle of pump and screw has set the pace for Bitcoin’s rise from $50-ish to almost $50k. Naïve investors are drawn into the game by the promise of incredible returns, fuelling a bull run. When the inflow of cash no longer allows for the scam of the moment to continue, one way or the other, those naïve investors get their coins taken from them, in exchange of MtGox IOUs, ICO shitcoins, or – in this cycle – worthless USDTs.

Because investors are never allowed to sell, Bitcoin doesn’t go to zero, its price hanging around aimlessly, until a new use case for Bitcoin’s pseudo-anonimity is found and a new serving of hapless suckers is sheered.

Caveat emptor.

The market capitalization of stablecoin Tether (USDT) has crossed the $30 billion mark.

At press time, USDT's market cap stands at about $30.5 billion, meaning there are more than 30 billion USDT in circulation, each pegged to track one U.S. dollar.

Tether has since long been the largest stablecoin in the market, but its popularity has surged even higher in recent months. Why? Because institutions and corporates are buying bitcoin, Tether CTO Paolo Ardoino told The Block.

Ardoino said these large customers prefer buying bitcoin from over-the-counter (OTC) and high-frequency trading (HFT) firms, rather than from a single trading platform, because these firms help avoid moving markets and have better liquidity.

By having accounts at most crypto exchanges, OTC and HFT firms spread the buying pressure, reduce the impact on bitcoin's price, and also complete purchases faster, said Ardoino.

When clients of these firms want to buy bitcoin, they send USD, and then these firms convert USD to USDT to bitcoin. This method is faster and "most convenient," Ardoino told The Block. Indeed, fiat transfers take time to process.

Asia and Europe remain the popular markets for USDT use, Ardoino told The Block, adding that Asia at the moment is "definitely more predominant."

While trading remains the top use case of USDT, Ardoino said Tether will be "working hard" this year on expanding its use cases, focusing on retail adoption of the stablecoin. 

Tether is popular, but it is also controversial. Tether has never produced a full audit of its USD reserves. Tether's general counsel Stuart Hoegner recently said in an interview that the firm would provide a breakdown of its reserves at some point in the near future.

Last week, Tether's sister company Bitfinex said it repaid Tether the remaining $550 million loan, which is at the center of a fraud probe opened by the New York Attorney General's office three years ago. Ardoino said since the loan is no longer present, "that should please many in the crypto community."

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The surge in price and corresponding FOMO has also caused the cryptocurrency token to climb the top ten assets by market cap, making it to the number three spot. Here’s why this is such a big deal for Binance and its native token.

The rally keeps on going, taking the price per BNB token to a high of over $300 per token as of today. At the 154 million and some odd BNB tokens in circulation, this has resulted in a $48 billion market cap, now nearly $15 billion ahead of the next closest crypto asset – the stablecoin Tether.

Tether’s market cap is solely supply based, as its price is tied to the dollar and doesn’t fluctuate significantly. Tether has had the number three spot for some time, taking from XRP as it sinks ever deeper down the list of top cryptocurrency by market cap.

XRP enjoyed the third rank for years once it got there, and only recently began its descent due to an ongoing lawsuit filed by the SEC against Ripple.

Binance Coin, however, was barely cracking the top ten before this month, and is now right behind only Ethereum and Bitcoin in terms of total capital.

As for why the token is performing so well, it is a sign of the overall demand for the crypto market as a whole. Bitcoin taking off helped propel altcoins back into an uptrend, which is now making investors money once again.

Chatter about coins making small fortunes, is once again luring more and more investors to altcoins. And there’s no platform that’s more so associated with altcoins, than Binance.

Tether’s (USDT) market capitalization recently surpassed $30 billion, according to data from CoinGecko.

Stablecoins like Tether (USDT), directly pegged to the US dollar, require minimal price fluctuations. Since Tether claims that each US dollar physically backs each USDT, this increase in Tether production may show an increase in demand for stablecoins as a whole.

As cryptocurrency prices rise, stablecoins provide a vehicle for users to exit their trades in crypto. They also allow for an easy store of value, especially for people with unstable fiat currencies that would highly benefit from the relative stability of the US dollar.

The stablecoin industry continues to grow, and USDT appears to be leading the way.

USDT has passed a daily trading milestone. The crypto regularly trades well over $100 billion per day, according to CoinGecko. This places it in the top spot in terms of volume.

This, however, doesn’t include the countless users holding it as a store of value. With increasing usage comes an increase in production, enabling easier access.

Some pundits argue that Tether prints massive amounts of USDT to artificially pump up bitcoin’s (BTC) price.

On Feb 8, Elon Musk announced that Tesla would purchase $1.5 billion in bitcoin. It seems that new institutional and retail investors are waiting in the wings. As more users get involved in cryptocurrencies and inject money into the market, they are looking for the most efficient way to interact within the blockchain economy.

For many who want to navigate between wallets, applications, and exchanges, or those looking to preserve their wealth, stablecoins like USDT are filling this role. Many users want access to the benefits of blockchain technology without moving their money back into fiat. As cryptocurrency adoption grows, expect stablecoins to play an increasingly larger role.

Harrison is an analyst, reporter, and lead specialist at BeInCrypto based out of Tel Aviv, Israel. Harrison has been involved in the cryptocurrency space since late 2016 and is passionate about decentralized ledger technology and its potential.

In a series of tweets on Feb. 10, the popular analyst and co-founder of trading suite Decentrader said that the cat was out of the bag for Bitcoin going mainstream.

Bitcoin's mainstream presence has exploded since Tesla purchased $1.5 billion of BTC, but not everyone is convinced. Within crypto circles, some still point to stablecoin Tether's emission and backing as reasons to be bearish.

As Cointelegraph reported, rumors continue to circulate about the financial buoyancy of Tether's issuer, despite multiple backlashes and USDT supply increasing at unprecedented rates.

"The game has changed", filbfilb summarized, noting that daily printing alone had reached $1 billion.

As such, short-term price targets are not only $50,000, but as high as $63,000 including some consolidatory moves along the way.

"IMO the target from the consolidation is c. 52k where I'm expecting a bit of a correction but the measured move overall should take us towards. 63ish," he added in a post to subscribers of his Telegram trading channel.

"Aggressive" sellers have already been outmaneuvered by demand, he noted.

On the topic of corporate adoption, he added that there are implications that few have considered, further making the bearish take on Bitcoin redundant. Consumers are already indirectly in on Bitcoin, and the performance of stocks from firms which have already made allocations will fuel the fire.

"I really dont think people understand that S&P500 companies owning Bitcoin means that by default people's pensions are exposed to Bitcoin. The % of people invested in Bitcoin has already reached the masses, they just dont even know it," he wrote.

The view directly rebuffs cautious words from JPMorgan analysts this week, who claimed that few companies will follow Tesla and MicroStrategy on Bitcoin due to its volatility. 

Speaking to CNN, however, MicroStrategy CEO Michael Saylor himself took volatility bears to task.

"If you're looking out for the long-term interest of your shareholders, I think they'd prefer if you double their money every six months than lose 75% of their money with a guarantee over the next eight years," he told the network.

The Dubai-based entity will allow citizens to pay for trade licenses and visa fees in Bitcoin, Ethereum, and Tether. As Arabian Business reports, KIKLABB believes that the move will set a precedent for other local firms, encouraging them to adopt cryptos. While it’s the first to accept crypto payments, it expressed confidence that it certainly won’t be the last.

“We’ve seen growing interest in cryptocurrency with several customers in the blockchain and fintech sectors part of the KIKLABB community, so it really was just a matter of time before we recognised Bitcoin, Ethereum and Tether,” Tasawar Ulhaq, the CEO stated.

Ulhaq believes that cryptocurrencies are the payment method of the future. As such, the UAE must strive to keep up with other nations or risk falling behind in the new wave of innovation. KIKLABB has set the stage for the government to begin crypto adoption, he remarked. The entity is already working with other players seeking to integrate blockchain in healthcare, education, and other fields.

 “We’re in talks with high-profile players in the cryptocurrency sector who are exploring entry into Dubai. In addition, we have a robust community of local and international companies associated with smart contracts, blockchain and private equity working alongside start-ups in the fields of education, healthcare, and food technology.”

As with many other cities globally, Dubai is seeking to get a first-mover advantage in blockchain integration. The city, home to the world’s tallest building, has already cemented its position as the leader in the Middle East. However, to become a global blockchain hub, it has to compete with cities like Singapore, London, Zug, and New York.

The UAE blockchain community has expressed its optimism about the future of the technology in the country. Many leaders believe that KIKLABB is the first of many public entities that will adopt blockchain.

Speaking to Arabian Business, the founder of social payments app Ziina, Faisal Toukan, stated, “In the future, I would expect all departments to follow suit. The UAE has taken the important step of moving cryptocurrency into the mainstream. As with most technologies, you have the pioneers, early adopters, majority, and skeptics. We’re currently on the fringe of moving from early adopters to the majority.”

For others, the move is critical as it will give the public another view of cryptos, not just as speculative and volatile assets. Arshad Khan, the CEO of upcoming exchange Arabian Bourse, remarked:

“Many just relate to crypto as a volatile asset class only good for speculation and trading. But developments like this demonstrate the true potential of crypto which is it being the most efficient medium of exchange.”

The UAE government has been advocating for blockchain adoption for years. It has been implementing its Emirates Blockchain Strategy 2021 for months now. This strategy is meant to ensure the government migrates at least 50% of all its transactions to the blockchain. The government estimates that such a move would save $3 billion annually. Dubai has also been separately working to become the first fully blockchain-powered city in the world. 

How to Swap Bitcoin to USDT ? :- Users of the Bitcoin.com Wallet also have access to a stowage, send, and secure coin at all times. Tether is the most common stable coin in the crypto-ecosystem. Bitcoin publishes recently how the company Tether Limited used the Simple Ledger Protocol technology to release more than six million USDT in the SLP.

As Bitcoin.com Wallet also allows users to store, send, and receive SLP-based tether close to carrying any SLP token (USDT). There are a variety of separate blockchains on which tether (USDT) is minted. Non-compliant with Bitcoin.com Wallet applications, ETH-based tethers or other forms of USDT coins not protected by the Basic Ledger Protocol. A way to receive SLP-based tethers by using In-App Swap functionality is provided by Bitcoin Wallet.

Confused about How to Swap Bitcoin to USDT? Users will exchange coins with the Sideshift.ai program using The Bitcoin Wallet. The method is straightforward and the exchange of coins using Bitcoin.com customers takes just a few minutes. Users may use wallet apps to exchange bitcoin cash (BCH), bitcoin (BTC), honest coin (USDH) and Tether (USDT).Tap the “Swap” button on the bottom of the wallet’s home screen to swap SLP-based tethers and it leads you to the in-app swap slot.

The other day, our news desk traded $6 of BCH for 6 tethers. from here you can pick which coin you wish to exchange. A live exchange rate for BCH and price per tether are seen in the swapping feature.

We have only chosen the BCH and USDT swap and picked a wallet, which reveals the basic log address of the wallet. The minimum amount required for a swap is BCH 0.003934997. After the sum of tether is chosen, just press the “confirm and swap” button to start the procedure.

You will find that the swap is on Side-shift and a message from the wallet from the alerts section will be sent to you.If the funds on the BCH blockchain have been validated, the tokens are sent to the SLP-token address. In the portfolio balance portion of the USDT tokens is compensated for by stable coins, and the cumulative value of all the crypto assets kept in the pockets is compared to the value on How to Swap Bitcoin to USDT.

With the support of Bitcoin.com, users have already been introduced to the creative crypto-ecosystems with the most premium goods and services. The readily available means that consumers have a greater control of their savings by securing secure coins and adjusting BCH or BTC for coins like USDT and USDH.

BTC-USDT map displays an amount of BTC-USDT to 148,894,811,778, which gives you precious information about the trading of BTC to USDT every day, in compliance with the 24-hour price review of the BTC to USDT chain. Tether(USDT) is a stable coin that keeps its value stable, a huge gain for traders relative to other cryptocurrencies. The price of BTC is very unpredictable and traders are thus vulnerable to tremendous risks as they buy. USDT may be a safe harbor for traders to shield them from inflation without unpredictable times fluctuation. In addition, the USDT dominates about 90 percent of the USD stable coin market. Out of expediency and lower trading costs, the exchanges have gladly forfeited the decentralization of cryptocurrencies.

USDT would satisfy all of the aforementioned aims, and would incorporate the advantages of decentralized cryptography with the universality and fungibility of an insecure fiat with a volatile volatile value. Coin Switch is the one-stop-shop with all your crypto requirements. You will start converting from different exchange rates to sell, making it irresistible for traders to make their best available at once. Purchase USDT on Coin Switch platform with BTC at the cheapest cost.

Coin Switch is a cryptocurrency platform aggregator supporting more than three hundred cryptocurrencies and more than four hundred thousand crypto pairs, like BTC to USDT. Buy Bitcoin to get the best of the stable coin advantages if there is no chance. A secure coin such as USDT will allow institutional and industrial players to invest the funds instead of keeping them.

You should take the steps below for Bitcoin USDT conversion

Your coins are traded and in your wallet you will receive USDT. Simple for How to Swap Bitcoin to USDT!

1 BTC is 49468.63338635 USDT that gives you the exact amount you get after you have traded the BTC to USDT. The BTC exchange rate was 49668.00000000 for the last 24 hours and it was 46759.86744570 for the lowest.

So, if I need them, how do I buy USDT? Next, another cryptocurrency you can trade for USDT to purchase USDT should be accessible. On average, 1 BTC to USDT is approximating the 18751.966 USDT trading pair. With the BTC/USDT converter you can verify the exact rate.

You have to use a cryptocurrency exchange for this cryptocurrency in your wallet. Nearly any crypto exchange is listed in USDT. To purchase Tether, search platforms and currencies, pick and buy the best price. You should use an exchange agglomeration which has all deals in one location to find a decent rate, and not to register with hundreds of exchanges.

Peter McCormack’s podcast with Paolo Ardoino and Stuart Hoegner from Tether/Bitfinex did shed some light on Tether’s operations. Stuart Hoegner, the general counsel, answered most of the questions. Given his position, the devil wasn’t in what he said, but how he said it.

Overall, it was a performance of deflecting questions, making legally true statements, and trying to sound legit AF while accusing “nocoiners” of creating “FUD”. Tether really needed to rebuild some goodwill with the coiner community.

Paolo Ardoino, while explaining how Tether can issue USDTs on weekends, says:

“most of our, uh, biggest customers are banked into the same bank (as Tether, i.e. Deltec)”.

It’s revealing how he paused after “most of our”, as he was about to say “most of our customers” – which would have been very weird. How come those hundreds of thousands of people who use USDTs all over the world could ALL have an account at a small banking institution in the Cayman Islands?

In fact, it’s not weird at all – Tether is calling “customers” a very small number of actual users, the ones Tether is issuing USDTs. The rest aren’t customers, they’re users. The distinction is very important, for Tether also says that they perform complete AML and KYC on their customers. This means that they know who are the people (some exchanges and OTC desks) to whom they issue USDTs; but after that first step, feel free to do whatever you want, the blockchain is your oyster!

Stuart also points out at the end of the interview that they don’t have US customers. Which also makes his claim that they’re regulated by FinCEN much less grand – after all, it’s not that hard to comply with regulations when none apply.

At the time Stuart had to swear on the NYAG affidavit, he admitted that Tether’s reserves were 74% cash and equivalents, the rest being an IOU from Bitfinex. He says, “USDTs are 100% backed by reserves, so the loan to Bitfinex is still good backing”, and later on, “so maybe people object to the amount of the backing, but it’s not nothing”. Oh it’s not nothing, case closed!

One thing is clear – these reserves aren’t cash. It can be whatever Tether wants, valued at prices convenient to them:

The rule of thumb is, whenever Tether talks about dollars, they don’t actually talk about dollars, but about their reserves, which aren’t dollars. Stuart says,

“[at the time of the affidavit,] other than $2.1B in reserves (and today, just for context, that amount has grown to $22B), Tether had cash and cash equivalents on hand representing approximately 74% of the current outstanding USDTs). Just note that that loan is now $550m out of almost $22B in reserves – 2.5% of the total.”

So we know the nature of 2.5% of their overall reserves – it’s the Bitfinex loan – but that doesn’t mean that the rest is cash. Why focus so much on such a small portion of their portfolio, then, if it isn’t to distract?

If you listened to the interview, you must have noticed how carefully Stuart is wording what he says, and the result is certainly very confusing for the average listener, who is entitled to believe they really have the $22 billion. I certainly heard exactly that, until I rewinded and listened to Stuart speak all over again.

Stuart also mentions “third party loans” as part of their reserves, like the loan to Bitfinex. Which is exactly how the fiat banking system works: banks will credit your account with new dollars if you sign an IOU. And it could very well explain how Tether ended up with a Bitfinex loan in the first place: Bitfinex needed 850m USDTs, didn’t have $850m, but simply signed an IOU for $850m. If you’ve seen the document, where Giancarlo Devasini, CFO of Tether and Bitfinex, signs both for Tether and Bitfinex, it’s epic.

Tether’s select few customers can access the USDT printer without any cash, and use the new USDTs for whatever they want. And you still wonder why Bitcoin has gone parabolic lately?

Peter McCormack asks them, point blank, if they own Bitcoin, and if they use Tether to pump Bitcoin.

As per the affidavit, Stuart confirms that they own Bitcoin:

“part of it is in Bitcoin; if nothing else, there are transaction fees, that need to be paid on the OMNI layer… we don’t presently comment on our asset makeup, overall, but we are contemplating starting a process of providing updates on that on the website this year”.

Note how Stuart doesn’t say that the only Bitcoin they have is for the OMNI layer transactions. So they have other Bitcoin as well? And by the way, why are supposedly segregated customer assets being used to pay for operational costs?

Peter insists, “What’s the process of the Bitcoin reaching your basket?”, and this time Stuart deflects, “Paolo, do you have any comments on that?”

Left alone neck deep in shit by his lawyer, Paolo has no choice but to ask Peter to change the question:

“Well, ummm… so… I’m not sure if the question is really clear. Are we talking about how we acquired the Bitcoin that we need to fulfil the OMNI layer transactions?”

No Paolo, the question was why do you have Bitcoin in your reserves, not why you have a few Bitcoin for clear operational reasons. Why don’t you want to answer it?

When McCormack asks Stuart if they buy Bitcoin on the market, “at the right time”, and then pump it with Tethers, Stuart replies,

“we don’t have the ability to buy Bitcoin at the right time in the market, we’re not prognosticators about wether the market’s gonna go up or down, that presumes some level of clairvoyance which we don’t have”.

Well OK but the question wasn’t if you can see the future, but if you buy Bitcoin – why deflect it in such a weird way?

Peter insists “people say that you have the ability to pump the market by issuing Tethers”, to which Stuart replies, “We don’t issue Tethers to buy Bitcoin. We issue Tethers to customers who want Tethers.” So if a customer that happens to be Bitfinex wants to pump Bitcoin with USDT, that’s fine.

Then Paolo answers with its own rhetorical question.

“The entire concept of us issuing Tethers to buy Bitcoins for ourselves doesn’t make sense. Why issue Tethers when we already have the dollars, and we have the ability to manage our inventory and out portfolio, when we could just use the dollars? The entire narrative is completely nonsense. Why do we have to do two steps when we can do one?”

To answer Paolo’s rhetorical question with another rhetorical question, may I venture,

“Why buy Bitcoins with real dollars, which are hard to get by, when you can simply print 20,000,000,000 USDTs that cost you nothing? Is it really because you’re too busy and want to save one step?”

Stuart boasts that all USDT redemption requests have always been met. Well, given Tether’s contract, that’s a pretty low bar:

The whole USDT contract is just incredible, when you read it. USDTs aren’t legal claims on Tether’s reserves. Maybe they are for Tether’s customers, who might have signed a different agreement with Tether. But if you’re not a Tether customer, USDTs are just digital toilet paper. You might be left with it forever on the blockchain, as a stark reminder that database entries without a contract in the real world, are utterly worthless.

The U.S. Securities and Exchange Commission (SEC) should be “looking to people” like Tesla CEO Elon Musk for market manipulation following the electric car maker’s recent decision to put bitcoin on its balance sheet, according to economist and prominent bitcoin critic Nouriel Roubini.

Musk has been tweeting about bitcoin and dogecoin in recent weeks, at one point updating the bio of his popular Twitter profile to “#bitcoin.” Tesla filed its annual 10-K report with the U.S. Securities and Exchange Commission Monday, saying it purchased about $1.5 billion worth of bitcoin in January. 

The New York University economics professor similarly criticized MicroStrategy CEO Michael Saylor’s “irresponsible behavior” for converting a significant portion of the business intelligence firm’s cash reserves to bitcoin considering the cryptocurrency’s volatility. MicroStrategy currently holds 71,079 BTC, according to an SEC filing last week.

In an interview on CoinDesk TV‘s First Mover, Roubini warned bitcoin could “collapse” if Tether, the issuer of the tether (USDT) stablecoin, and crypto exchange Bitfinex are indicted this year. Tether has an eye-popping $31 billion market capitalization, and is subject to multiple ongoing investigations, including from the U.S. Department of Justice and the New York Attorney General’s office. At the center of the DOJ’s criminal investigation into Tether as an organization is whether or not USDT is used to inflate the cryptocurrency markets. 

Bitfinex claimed last Friday it repaid the remaining balance of a $550 million loan to its sister firm, Tether. In 2018, the exchange borrowed over $600 million from Tether, with which it shares executives and ownership. The transaction was made public in April 2019 after the New York Attorney General’s Office alleged Bitfinex lost $850 million in customer and corporate funds to payment processor Crypto Capital Corp., and used funds from Tether’s reserve to secretly cover the shortfall.

Roubini predicts the world will eventually “phase out cash” and the U.S. will create an “e-dollar.” Central bank digital currencies will allow central bankers to swiftly maneuver monetary policy, he said, and normalize negative rates in times of economic crisis.

Watch the full interview with Dr. Roubini above.

Tether’s market capitalization is 47% higher than XRP and it ranks third, after Bitcoin and Ethereum. Despite being shrouded in controversies, it has led the stablecoin market and added $100 million in market capitalization every day since July 2020. Tether reserves on exchanges dropped in August 2020, however, there was a recovery above the 1.5 billion level in September 2020.

Based on data from Cryptoquant, the dependence of trading activity on Stablecoins is over 2 times higher than it was, at the beginning of 2020. Current stablecoin reserves are at 2.3 billion, against 1.5 billion in January 2020.

Corresponding to this, Bitcoin’s dominance has dropped and stablecoin market cap and dominance have increased. Thus largely influencing a high percentage of new buyers and retail traders on spot exchanges. If Tether faces charges, though retail investors’ holding in USDT won’t be affected, however, there may be a rush to sell before Bitcoin prices drop further. This may increase Tether market capitalization, and though the Treasury will keep up by minting more Tether and adding to the supply, Bitcoin’s dominance and price may drop below the 200-day average and the $10.5k level that it has sustained. 

Tether has provided stability to the crypto market during the downturns in Bitcoin’s cycle and this has had a large impact on the price. It is a cycle. However, to break out from this, traders’ dependence on Tether would have to reduce and other stablecoins would have to capture market share. However, that seems unlikely in the short run. In this case, it may possibly be game over for Tether if it finds itself in the crosshairs of the CFTC.

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Ekta is a full-time journalist at AMBCrypto and her specialization lies in spot markets. Currently pursuing her MBA, she is passionate about trading, fintech, and everything decentralized

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ADA price – Bitfinex launches perpetual contracts for Litecoin/Bitcoin and Polkadot/Bitcoin

In a new addition to its perpetual contracts, Bitfinex made news today with the launch of its new contracts for cryptocurrencies paired with Bitcoin such as Litecoin/Bitcoin (LTCF0:BTCF0) and Polkadot/Bitcoin (DOTF0:BTCF0).

According to the Bitfinex website, transactions in the perpetual contract and funding payments will be settled exclusively using Bitcoin, as it is typically done due to the asset being the “settlement token.”

As of last week, the derivatives platform launched perpetual contracts for Stellar and Cardano that are settled in Tether (USDt). This announcement followed the launch of new contracts for IOTA, Chainlink, and Uniswap, in November 2020.

Addressing yet another addition to the list, Paolo Ardoino, CTO at Bitfinex said that the perpetual contracts are now available to trade on the exchange and that the Bitfinex team anticipates “great interest” from funds and professional investors in the new Litecoin/Bitcoin and Polkadot/Bitcoin perpetual contracts.

According to a release shared with AMBCrypto, Litecoin/Bitcoin and Polkadot/Bitcoin perpetual contracts went live on 10 February. 

The platform features several contracts for other cryptocurrencies, which include EOS, Litecoin, and Polkadot. Other than digital currencies, Bitfinex launched perpetual contracts for Silver , as well as for Tether Gold, the stablecoin pegged by gold. 

Other perpetual contracts paired with Bitcoin include Ether/Bitcoin, and a host of cryptos pairs with stablecoin Tether such as Bitcoin/Tether (BTCF0:USTF0) Litecoin/ Tether (LTC/USDt), Polkadot/Tether (DOT/USDt) among others. 

ADA price – Bitfinex launches perpetual contracts for Litecoin/Bitcoin and Polkadot/Bitcoin Tags: ADA price, Cardano

In a new addition to its perpetual contracts, Bitfinex made news today with the launch of its new contracts for cryptocurrencies paired with Bitcoin such as Litecoin/Bitcoin (LTCF0:BTCF0) and Polkadot/Bitcoin (DOTF0:BTCF0).

According to the Bitfinex website, transactions in the perpetual contract and funding payments will be settled exclusively using Bitcoin, as it is typically done due to the asset being the “settlement token.”

As of last week, the derivatives platform launched perpetual contracts for Stellar and Cardano that are settled in Tether (USDt). This announcement followed the launch of new contracts for IOTA, Chainlink, and Uniswap, in November 2020.

Addressing yet another addition to the list, Paolo Ardoino, CTO at Bitfinex said that the perpetual contracts are now available to trade on the exchange and that the Bitfinex team anticipates “great interest” from funds and professional investors in the new Litecoin/Bitcoin and Polkadot/Bitcoin perpetual contracts.

According to a release shared with AMBCrypto, Litecoin/Bitcoin and Polkadot/Bitcoin perpetual contracts went live on 10 February. 

The platform features several contracts for other cryptocurrencies, which include EOS, Litecoin, and Polkadot. Other than digital currencies, Bitfinex launched perpetual contracts for Silver , as well as for Tether Gold, the stablecoin pegged by gold. 

Other perpetual contracts paired with Bitcoin include Ether/Bitcoin, and a host of cryptos pairs with stablecoin Tether such as Bitcoin/Tether (BTCF0:USTF0) Litecoin/ Tether (LTC/USDt), Polkadot/Tether (DOT/USDt) among others. 

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Alisha is a full-time journalist at AMBCrypto. Her interests lie in blockchain technology, crypto-crimes, and market developments in Africa and the United States

The U.S. Securities and Exchange Commission (SEC) should be “looking to people” like Tesla CEO Elon Musk for market manipulation following the electric car maker’s recent decision to put bitcoin on its balance sheet, the economist and prominent bitcoin critic Nouriel Roubini said. Tesla’s CEO has been tweeting about bitcoin and dogecoin in recent weeks, at one point updating the bio of his popular Twitter profile to “#bitcoin.” Institutional interest in bitcoin has boosted the price of the leading cryptocurrency to new all-time highs. 

Elon Musk’s Tesla filed its annual 10-K report with the U.S. Securities and Exchange Commission Monday, saying it purchased about $1.5 billion worth of bitcoin in January. The New York University economics professor similarly criticized MicroStrategy CEO Michael Saylor’s “irresponsible behavior” for converting a significant portion of the business intelligence firm’s cash reserves to bitcoin, considering the cryptocurrency’s volatility. MicroStrategy currently holds 71,079 BTC worth over $3 billion, according to an SEC filing last week. 

In an interview on  CoinDesk TV’s  First Mover, bitcoin cynic Nouriel Roubini warned about how bitcoin could “collapse” if Tether, the issuer of the Tether (USDT) stablecoin, and crypto exchange Bitfinex are indicted this year. Stablecoin USDT has a $31 billion market capitalization and is subject to multiple ongoing investigations, including from the U.S. Department of Justice and the New York Attorney General’s office. At the center of the DOJ’s criminal investigation into Tether as an organization is whether or not USDT is used to inflate the cryptocurrency markets. Roubini further predicted that the world would eventually “phase out cash,” and the U.S. will create an “e-dollar.”

I n this article Alex Pickard, vice president of research at Research Affiliates, explores Bitcoin’s journey from when he first started investing in it in 2013 to its current record rally, and explains why investors should proceed with caution.  

“Know what you are investing in” is a steadfast, uncontroversial investing adage.

Unfortunately, when it comes to bitcoin, this advice is being dangerously overlooked by both novice and seasoned investors. In this article I seek to set the record straight on what bitcoin was and has become, and what I believe is the biggest risk associated with bitcoin today.

Bitcoin’s early days

When I bought my first Bitcoin [BTC] in 2013 at 25 years of age, it was a small investment appropriate for my risk tolerance and stage of life. Not knowing much about it at first, I began learning all I could.

My conviction grew, and in 2015 I invested much more, between $400 and $700 a coin. Little did I know I was about to go down a rabbit hole that would ultimately take me to a small town in central Washington state, building rudimentary data centres in garages to cash in on the Bitcoin mining craze.

Bitcoin was designed to be a digital cash system. Unfortunately, the first real use case was Silk Road, an online marketplace for buying and selling illegal drugs. Although this gave bitcoin a bad name, the potential for its use in legal commerce was obvious. I liked the fact that a limited supply of bitcoins (21 million) was built into the protocol. It was a currency, not backed by a government but by computing power and law, so its value could not be inflated away. Bitcoin as a cash system was a very attractive investment in my view.

In the early days of bitcoin, because few people really understood how it worked, investors would send and receive units of bitcoin to gain a better understanding of the investment they had made. They saw their BTC leave one wallet and enter another wallet within seconds. In the early 2010s, instantaneous payment tools such as Venmo by PayPal [PYPL], Cash App by Square [SQ], Apple Cash [AAPL], and Zelle did not exist. Options for sending money were limited. An ACH transfer took several days, and wiring money could take several hours at a cost of around $25, whereas bitcoin fees were less than a cent. Bitcoin had a magical feel to it.

Today, bitcoin fees are roughly $10 per transaction, yet the average investor has never actually used bitcoin for transacting. Why would they? Modern USD payment tools are far superior to BTC. Instead, investors are purchasing units of BTC on Coinbase and watching in awe as the value of their investment increases. Certainly, the magic remains, but because bitcoin has changed over time, investors need to work to stay informed about their investment.

By 2017 my BTC call had resulted in windfall returns. I decided to quit my job in quant finance, roll my BTC profits into bitcoin mining equipment, and move from sunny, beautiful Newport Beach, California, to (less sunny, less beautiful) Wenatchee, Washington. Wenatchee was situated next to a giant hydroelectric dam on the Columbia River in Chelan County and had the cheapest electricity in the nation at a cost of about three cents per kilowatt hour. Electricity is a bitcoin miner’s largest expense after the cost of purchasing specialized mining computers.

After purchasing a large number of these computers, I was up and running, making several thousand dollars a day. Sadly, the magic did not last long. Although I diligently abided by all regulation related to bitcoin mining in Chelan County, in January 2018 I had to shut down my mining farms because I was putting a strain on the electrical grid. To make matters worse, soon after that, the BTC price started falling, and my equipment, gathering dust, was depreciating even faster. Overloading the grid and being forced to shut down was a risk I had not contemplated. Lesson learned: Always know what you are investing in!

Investing in Bitcoin in 2021

Bitcoin in 2021 is arguably harder to understand than Bitcoin in 2013. Whereas in the early days bitcoin was easily defined as an online cash system, today it is much more ambiguous. Most proponents claim bitcoin is an unseizable, censorship-resistant, “digital gold” that provides inflation protection. Of course, like many narratives, this one relies on proponents’ completely ignoring the data.

So, let’s consider the data. Bitcoin, like gold, is a vehicle for speculation. It is not a vehicle for investment, not a store of value, and not an inflation hedge. BTC is not a capital asset: it does not generate cash flows derived from economic returns on capital. Its extreme volatility invalidates claims of a reliable store of value and calls into question any inflation-hedging properties. In 2018, the price of bitcoin plummeted by 83%, while inflation expectations (five-year-forward five-year BEI) remained anchored at 2%. Then, from year-end 2018 to year-end 2020, the price of bitcoin rose sevenfold, while forward BEI ended the year again at 2%.

Bitcoin is not unseizable. A quick google search of “Bitcoin seized” will uncover countless instances of governments’ confiscating bitcoin from illicit businesses, including Silk Road. This reality contradicts part of the old narrative about bitcoin—that it is useful for criminals. Bitcoin is easily trackable on the public bitcoin blockchain, making it a bad choice of currency to use when committing crime. The popular financial press seems to have caught on to this fact, as “good for crime” is rarely mentioned anymore.

Events of August 2017 altered the trajectory of Bitcoin. A little known but drastically important change occurred to the bitcoin source code with the addition of segregated witness (separating signature data, or witness, from transaction data) (Nguyen, 2017) and the contemporaneous decision by BTC miners to keep the block size at 1MB.

The technical details of the change are outside the scope of this article, but the outcome is that bitcoin is no longer a digital cash system as described by Nakamoto (2008). No longer can Amazon [AMZN] or any other online merchant adopt it for use as a medium of exchange. Essentially overnight it became “digital gold” with no use other than for people to buy and hodl (a misspelling of “hold” that was first used on a message board in 2013) and hope more people would buy and hodl, and increase the price of BTC until everyone on earth sells their fiat currency for BTC, and then…? Well, what exactly happens then, when BTC can only handle about 350,000 transactions per day and 7.8 billion people need to buy goods and services?

Despite all of this, it is hard to resist the siren song of bitcoin when, over the last two years, the price seemingly never goes down. Bitcoin proponents promote the BTC narrative and then point to the price chart as confirmation of their story. Perhaps they are on to something, or perhaps BTC is just a bubble driven by a frenzy of retail, and some institutional, money eager to get a piece of the action. Alternatively, and far likelier in my opinion, is that this “bubble” is more fraud than frenzy.

Bitcoin frenzy or fraud?

Is it possible that bitcoin’s meteoric rise is not due simply to higher and higher demand for digital gold? Perhaps, as some have alleged, the price of bitcoin is being artificially manipulated through at least one stablecoin, Tether, and potentially others. Griffin and Shams (2019) have empirically documented this theory. 

Tether is currently being sued by some investors who allege that no one is actually buying USDT from Tether Limited, but are minting USDT out of thin air, bypassing the supposed one-to-one (USDT/USD) backing (Mizrahi, 2019). They further allege that agents for Tether then use USDT to buy bitcoin (and select other cryptocurrencies in favour with Tether) on exchanges, such as Bitfinex and Binance, that offer trading on the BTC/USDT pair.

This action pushes up the price of the BTC/USDT pair. Because USD/USDT trades at dollar parity, the price is arbitraged on exchanges that trade the BTC/USD pair. Tether’s agents can then sell the BTC for USD and deposit them into the Tether bank account in case of audit and Tether could claim the USD were always there.

Additionally, Tether has been under investigation by the New York Attorney General for fraud unrelated to market manipulation since April 2019 (James, 2019). Interestingly, as part of the court proceedings, Tether has admitted USDT is only backed by 74 cents on the dollar (Chalmers, 2019). 

How long can the magic last?

If, indeed, one USD backs every USDT, then yes, the meteoric price rise of BTC we are currently witnessing could be a bubble, not unlike previous bitcoin bubbles. The price could go higher, but at some point, it is likely to suffer a tremendous decline, as was the case when the last two bubbles ended down 80% from their peaks. Considering the amount of attention BTC has been getting lately, it hardly seems likely that BTC’s price can increase roughly five times more from here, a trajectory that would be required for an investor after an 80% drawdown to end up even with the current market price. As the saying goes, “Buy fear, sell cheer.”

If the market manipulation story is true, then BTC is not in a bubble in the traditional sense (Arnott, Cornell, and Shepherd, 2018), but is in the midst of something that could be much worse. If Tether were to be shut down, and if, in fact, artificial demand from Tether was supporting the price, the losses from a BTC crash may not be recoverable. 

If Tether continues as a going concern, and if the rising price of BTC is linked to USDT issuance, then BTC will likely continue to mechanically build a castle to the sky. I have shown how BTC price increases usually follow USDT issuance. In late 2018, when roughly one billion USDT were redeemed, the price of BTC subsequently fell by over 50%. Now, imagine what would happen if Tether received a cease-and-desist order, and its bank accounts were seized. Today’s digital gold would definitely lose its lustre.

Regardless of the reason for BTC’s astronomical price movement, investors should resist the temptation to chase the price. Extreme fluctuations in price invalidate claims that BTC is a store of value. Neither is it a capital asset – it is merely an entry in a digital ledger. BTC does not generate cash flows, and its only real use is to sell to someone else. High transaction fees make it a poor currency and negate claims of fungibility. The price of BTC is nearly certainly a bubble and likely manipulated. Investors should proceed with extreme caution.

This article was originally published on the Research Affiliates website by Alex Pickard and included contributions from Rob Arnott, founder and chairman, Chris Brightman, chief investment officer, and Bradford Cornell, a professor at the University of California, Los Angeles.

In a recent press release, the BtcTurk exchange has announced that the Tether (USDT) stablecoin is now active on the platform.

BtcTurk is the largest exchange operating in Turkey, active since 2013. It was the fourth-largest exchange in the world at the time, so it is easy to understand how its position has strengthened over the years.

The platform has a Pro version where there are more tools for more experienced users and it is here that the Tether (USDT) stablecoin has been integrated with the Liquid blockchain to guarantee transfers of around 2 minutes.

This stablecoin is very versatile because it can be found on several blockchains, with Liquid being one of them.

The CTO of Tether, Paolo Ardoino, explained:

This is an expansion that goes beyond the simple listing of any stablecoin, since it is a real asset recognized and used by everyone, especially in decentralized finance (DeFi), as the CEO of BtcTurk, Özgür Güneri, pointed out:

The influence of this asset will certainly be felt within the Turkish exchange.

Among other things, the numbers show that Bitcoin (BTC) trading in Turkey is on the rise, demonstrating that the country is interested in crypto assets and their use.

Recently, Paxful also announced that it intends to expand in Turkey through two partnerships with BiLira (TYRB) and Cointral. As declared by Paxful’s CEO in a recent interview, Turkey is one of the fastest-growing countries in terms of crypto adoption.