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Comment by Andrew_nenakhov | Hacker News Reader

People on reddit and twitter are like, "great, now that Tether FUD is over, leave it behind and go for $100k!" - of course it is over. U in FUD stands for Uncertainty, and now it is Certain that Tether is a fraud.

The only thing I can't understand is why the price still pumps.

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Same reason why prices went way up before MTGOX collapsed. People have "assets" in Bitfinex that they can't cash out for something with real value except by buying crypto and hoping it gets transferred out before reserves are depleted. They can't cash out actual fiat. So fiat prices on the failed exchange go up up up until the legit regulated exchanges eventually decouple and then the house of cards comes down.

Keep in mind people will try to take advantage of arbitrage situations so this process can take a while. Go back and research MTGOX.

Where would one start to research this?

Are there delays on Bitfinex transfers currently? And were people able to transfer out of MTGOX at all?

I had wondered if there were parallels in the runup, but haven’t heard widespread reports of people being able to transfer out yet. Or rather, more than the usual number of such reports, there are always some.

Can you convert those assets to Gemini's stablecoin, GUSD? Gemini is regulated as a trust company in New York State and has pass-through FDIC insurance. You should be able to sell GUSD on Gemini and wire transfer the proceeds out. Gemini claims no limits on the size of wire transfers. This is useful, because most other exchanges make large withdrawals difficult.

It's hard to convert USDT to GUSD. Coinbase does't list GUSD. Changely says they will do it for a 2% fee. Bequant has a market, but US$20,000 would wipe out their order book. Hotbit claims a deeper market but has a US$10,000/day withdrawal limit. Bitfinex has de-listed GUSD. Probably because it was too convenient a way to convert Tether to real US dollars. Gemini does not list USDT.

It's striking how difficult it is to convert large amounts of USDT to a hard currency.

What's stopping someone from doing USDT -> BTC -> USD?

Finding an BTC exchange that will reliably pay out millions of USD isn't easy. Although Gemini says no limits on wire transfers.

> The only thing I can't understand is why the price still pumps.

I know for a fact that there are private banks, the traditional ones (think Swiss banks), working on funds that'd let their HNWIs invest in crypto. We're talking about entry tickets to the tune of 1 million EUR minimum. It's not private/confidential infos: it's information some private banks are relaying to their very wealthy clients.

There are a lot of people who want to get in but have zero clue as to how to do that: now their traditional banks are going to let them do that.

There are simply people out there who want to buy.

Seriously - Bitcoin is more than 8% up today and about 50% up compared to 3 weeks ago. It's almost back to the all-time high from April. How does anyone explain any of this?

A complete lack of regulation in the markets.

I can explain - More people want to buy than sell

Thats not really how it works - every transaction must have a buyer and a seller. When prices go up, buyers are simply willing to go deeper into the order book to get their orders filled.

More simply, more money (not people) is buying than is selling.

> How does anyone explain any of this?

Suppose you hold a big bunch of USDT (Tethers) right now.

What would be be doing in light of these news?

Exactly.

Why not just convert to USDC / BUSD / some other stablecoin?

Or Dai or Gemeni Dollars?

How do you convert if nobody wants to buy your USDT?

Bitcoin's price "in USD" makes more sense as a price "in USDT". It's completely unsurprising that Bitcoin went up relative to USDT after this news.

The big question is when the peg of 1 USDT ~= 1 USD (or USDC) is going to break. Tether is going to do everything they can to maintain that peg as long as possible.

> The big question is when the peg of 1 USDT ~= 1 USD (or USDC) is going to break. Tether is going to do everything they can to maintain that peg as long as possible.

Yuup. Assuming USDT is a fraud, Tether likely makes very good money off of it, and is hence HEAVILY incentivized to keep it running as long as possible. I'd be very curious to hear theories as to what might cause it to collapse.

Complaints by companies trying to exchange usdt to usd

But those companies would only complain if Tether stopped redemptions, which presumably would only occur if they ran out of cash. You'd need some other outside impetus to trigger it all.

I could tell you, but because this information could reduce my purchasing power, I’m choosing to keep quiet.

I’m not willing to share the short/medium term philosophy, catalysts, and predictable patterns. But I’ll reshare the long term philosophy since I’ve already written about it 4 months ago:

https://news.ycombinator.com/item?id=27202204

If you’re smart and knowledgeable, you may be able to piece it out from my comment history.

It looks like a Bitcoin futures ETF is nearing approval and could go live next week [1][2]. My guess is that people are pricing that in.

[1] https://www.cnbc.com/2021/10/15/bitcoin-etfs-may-finally-mak...

[2] https://twitter.com/JSeyff/status/1449010847074897933

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