Is Tether Manipulating The Bitcoin Price?
A few weeks ago, on 27 December to be exact, economics professor and famous Bitcoin basher Nouriel Roubini went on CNBC to once again blast cryptocurrencies just as the whole world seemed to be talking about only one thing, namely that Bitcoin had broken through $20,000. He also mentioned Tether, and said that this stablecoin was also a sham.
The CNBC interviewer didn’t follow-up and just left that hanging. Roubini referred to a press release from the US Treasury Department which had been released 4 days before. In it, the Treasury stated it was investigating stablecoins.
Financial Conduct Authority (FCA)
By now, multiple bloggers, social media enthusiast of the cryptosphere and even journalists have started to wonder whether the Bitcoin price is actually artificially being inflated by Tether.
Last week Monday, as Bitcoin dropped more than 10% in a day (as it sometimes does), the UK’s Financial Conduct Authority claimed that anyone who invests in crypto “should be prepared to lose all their money”.
Ever since those two separate warnings, multiple voices have started to raise the alarm about Tether, with a long-spun article from Jacob Silverman in The Soapbox looking at it in detail.
Tether is not like other cryptocurrencies in the CoinMarketCap top 10. It is a stablecoin pegged to the dollar and can choose for itself when it prints more or less Tethers. For each printed Tether there has to be 1 dollar (in the form of any asset) in their treasury. To date, Tether hasn’t been able to prove that they have their full market cap in dollar on their bank account.
The crypto community is patiently waiting until Tether Inc. can prove that Tether’s reserves contain the same amount of USD as their market cap. The deadline to prove this was 4 days ago…
Crypto Whale, the contrarian investor who in the past has (rightly) warned about DeFi scams just before the end of summer bubble of several food coins burst, now states that Tether’s bubble into Bitcoin is about to burst, and that the 2017 chart should be overlaid with the 2020 one.
He stated that:
55% of all Tether in circulation was printed in the last 90 days.
Will he prove to be right or not? Time, as always, will tell.