Tuesday, November 21, 2017

The BIGGEST risk in cryptos right now

It's not government regulations. (China failed)

It's not a mining revolt. (BCH and B2X failed)

It's not for being called a ponzi, fraud or a scam. (DBS CIO whateva his name is, Dimon, Buffet, etc etc etc)


It is the $600M USD giant white elephant in the middle of the entire freaking room named Tether.

Tether is a crypto representation of 1 USD stored in a Taiwanese bank account. Supposedly. There has been no audit on their assets.

Tether is NOT claimable for actual USD. Their website does not allow you to exchange Tethers for USD.

Tether started out 2017 as a $10M problem. It is now a $674M problem, and growing.

If you do want to know more about this whole Tether conspiracy (it's looking more and more like the obvious reality though), check out this Twitter account and all of his tweets to learn more.

How are Tethers created? Beats me.
How are Tethers redeemed? I have never come across anyone that has actually redeemed it.
Have people tried to redeem Tethers? Yes, many, but no one has successfully done so.

It is extremely likely that these supposedly backed and redeemable coins are actually, in fact, NOT backed by USD and also NOT redeemable for USD.

Whether Bitfinex and Tether blow up today or tomorrow or never, it's anyone's guess.

If crypto has a stablecoin that has enough cross pairs for people to trade into BEFORE the blow-up, I think crypto world will not be rocked so hard.

If crypto does not have a stablecoin, I think we can see a pretty nasty bear market til the death count can be accurately accounted for.

Stablecoin projects like Maker's Sai / Dai and DigixDAO's DGX cannot be needed any sooner.

What am I doing to mitigate the risks?
- No more usage of Bitfinex
- Avoid Tethers like the plague
- Quick trades and cleans sweep of exchange accounts with USDT pairs
- Familiarize and set-up myself to be ready to make use of crypto stablecoins when they launch

I have no idea how it ends, but I think the evidence is clearly pointing that a blow up is inevitable.

6 comments:

  1. Hi GMGH,

    Coincidentally, I wanted to highlight the issue of Tether in my coming posts. There's actually quite a bit of fair pump from the USDT to many coins out there. It is a ridiculous joke.

    Printing tether out of the thin air and pumping it into the crypto to inflate many's market capitalization hence driving the price. It seem that in time soon, when people realize this big joke about Tether, many that owns it will start having a problem and creating a big problem out of it, which leads to what you mentioned up there - a blow up.

    I foresee that coming soon, as many are starting to realize that it is a total piece of crap.

    ReplyDelete
    Replies
    1. Aha. Just as I'm writing about this. Tether got hacked. What a joke.

      Delete
    2. Lol I know, hilarious isn't it. Great minds think alike! Crypto is always so exciting.

      Delete
  2. hi GMGH

    this would cause a clash in BTC isnt it?

    ReplyDelete
    Replies
    1. A crash? 20% drop? I think it is unlikely.

      However, this can lead to a crash if more allegations are proven to be true. It certainly seems possible, and actually, quite likely.

      Delete
  3. Hi GMGH,
    Good warning on tether. Managed to scrape thru relatively unscathed yesterday but the scare is pretty palpable.

    Question is, many used tether as a sort of base currency to trade, given that btc and eth prices fluctuate so wildly, instead of trading with fiat given the charges. How do you do it? Do you use btc as a base to trade?

    ReplyDelete

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