>The gains can be explained by nothing else than mania and speculation
And almost 22 billion fake tether dollars injected into the space.
And almost 22 billion fake tether dollars injected into the space.
As someone who is an amateur looking in, could you help fill in the holes in this picture? Why do we need tether? Why does it matter if tether is not backed 1:1 by USD? If the fraud really is so obvious and impactful, why 1) isn't BTC tanking and 2) why aren't there charges filed against the company?
I'm not sure how it's supposed to affect current prices, however. Tethers are still around, and as far as I know, they have not submitted to an audit, but 1 USDT is still trading for 1 USD.
They promised to produce documentation that should shed significant light on the situation by January 15 of this year [0]. In recent days, they have issued up to $800M tokens a day [1].
Which either means that everything is going just swimmingly, or that somebody is stuffing a few more suitcases with cash while heading for the airport. We may soon find out.
[0] https://cointelegraph.com/news/ny-attorney-general-expects-d... [1] https://twitter.com/usdcoinprinter/status/134612804290579251...
There are, it's currently under investigation, lookup tether/bitfinex new york court case.
Tether is needed as many exchanges cannot trade in USD so need a crypto-substitute in a form of a 1:1 dollar equivalent stable coin.
Not being backed matters because it means a single company can essentially print infinite money and buy up crypto, leading to fast price increases, just like the one we are seeing right now. When you see $30000 price tag on a bitcoin you don't know what percentage of it is actually fake USDT dollars. Right now it doesn't mater as you can exchange usdt for usd 1:1, but one day the music will stop and a "bank run" will happen, which will expose a giant hole and a real price of btc, collapsing the whole scheme.
>why 1) isn't BTC tanking
My current theory is that they co-opted a lot of exchanges, if you read their website https://tether.to/ they admit that they are not backed by USD and mention "loans made by Tether to third parties" which sounds like they give exchanges billions of dollars for IOUs. So exchanges get free billion dollar loans and in turn tether can print more billions and trade it for real money on bitfinex which they own.
You only get taxed on gains when you transfer coins to "real" currencies like USD... so you can use Tethers instead and buy Bitcoins back after a drop
What if I transfer from a Bitcoin wallet to another Bitcoin wallet?
The IRS has designed crypto as a property, so you are subject to paying capital gains (or claiming capital losses) whenever you sell, convert, pay or earn. Converting one crypto to another (or to USD) is a taxable event, while transferring BTC in one wallet to another wallet is not (since you keep the same property). Further details at https://www.coinbase.com/bitcoin-taxes#paytaxes.
If you sell a car for more than you bought it for, you do owe taxes on that. https://www.carvana.com/research/2020/03/what-to-know-about-....
It is not since it is a different private key...
Again, the understanding of "property" is evolving in this environment, and there are areas of regulatory uncertainty (such as synthetic assets from staking collateral in money markets). However, transferring from one wallet to another is pretty safe territory.