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Comment by pavlov | Hacker News Reader

The German police will presumably sell the coins for euros because authorities don’t like to hold volatile exotic instruments any longer than they have to.

I wonder if two billion euros worth of Bitcoin is enough to move the market. Most of the trading volume is in other crypto like stablecoins. Finding buyers worth two billions in actual cash may be harder.

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Grayscale ETF has been selling $5B over the last two weeks. While the Bitcoin price is volatile, it has not significantly dropped.

for large transactions you'd do OTC sale (over-the-counter) where you handover the whole amount to a 3rd party

this 3rd party then offloads the sale on their own timeline

Transactions that aren't on an exchange still affect the market.

The way large trades are done is you structure periodic block trades representing a small fraction of the volume in that time period. As an example you would sell 10% of the daily volume every day until you finish liquidating your assets.

It's not always the case. US government is still holding more than 100000 Bitcoins from the 200k it seized.

It's a great way for governments to hold BTC without raising suspicion of ,,advocating for'' it.

I think I read long ago that it takes almost 7% liquid market cap to trigger a major movement. Current market cap $800b, so if true then no, 2b wouldn't be enough.

I might be pulling 7% out of thin air though, it's been a long time since I was reading about crypto market manipulation.

They will probably auction it away

If it shows any risk to the price of Bitcoin, Tether will just print tokens out of thin air to buy them. As is tradition

Who'll be buyer for 2B worth of tether?

The exchanges and crypto trading firms take billions of Tether in the form of bitcoin-collateralized loans [1].

Alex Mashinsky, former CEO of the now-defunct Celsius Network, described how it works [2]:

“If you give them enough collateral, liquid collateral, bitcoin, ethereum and so on ... they will mint tether against it,” he said.

“New USDT is issued for such loans,” he added, and later destroyed when the loan is closed “so it does not permanently increase USDT in circulation”.

If true, this contradicts Tether's claims that it only mints USDT in exchange for USD-backed treasuries.

[1] https://www.dirtybubblemedia.com/p/examining-tethers-secret-...

[2] https://www.ft.com/content/0035016c-29ad-4e6f-9163-2a17df490...

No one. But they don’t need a buyer to create Tether coins.

But if they want to buy Bitcoin with them there needs to be someone on the other side of the transaction.

Which is fine, as long as the Tethers aren’t turned into real money their value isn’t realised. They stay in the system and the charade goes on

The users of USDT are fine with this scheme (at least, they've been so far)

It could be pretty much the Germany police, directly or indirectly, since Tether proposes non volatile "currency" easily convertible with Bitcoin.

But the German police wants real money not Tether. There needs to be someone to offer it or BTC/USD will collapse.

Of all the things to see the Tether people indicted for on HN,

it's increasing the price of Bitcoin?!

Is that a surprise to you?

https://blog.dshr.org/2024/01/good-news-for-tether.html?m=1

Well, yeah. It is a surprise to me.

They're linked up heavy with dirtbag fraudsters, and pedophiles.

Seems worth mentioning.

And yet you didn’t

...I just did.

Please stop only posting hot takes and "gotchas" here. Be more substantive.

These conspiracy theories have been around for years, it's not new.

I have no idea if they are true or not, but certainly the people that believe them do not have evidence.

Tethers already been fined for misleading people by saying their coins are 1-1 backed by USD. That’s evidence

Please provide one reason to believe that USDT is actually 1-for-1 backed by USD. Because they say so?

Tether is the crypto version of a wildcat bank. It's totally unaudited, it's owned and operated by a former plastic surgeon and others with limited experience in finance, and it's been heavily fined by the state of New York for its shenanigans. It's only a matter of time before they implode like 3AC, Celsius, FTX, Signature, etc. etc.

Tether's business is very profitable right now because they don't have to pay interest. They can park all the money people hand to them in exchange for tether in T-bills and earn 5%. Meanwhile the people holding the tether get nothing. Basically, they are a bank that pays no interest on deposits.

If they were smart they would keep them, but Western governments are rarely smart about this.

They should be able to find buyers at OTC desks and ETFs without affecting the market too much.

Why would they keep them? That’s holding on to currency risk for a potential price increase.

The government isn’t used to or wants to hold that kind of assets.

Some of the largest holders of Bitcoin are US and Chinese governments, due to confiscations. The government is not in a rush to sell.

First this is just a hold. They can't do much with it at the moment till court proceedings are over.

If there are fines which go to the state the state is not supposed to speculate, but spend it on investments, repay debt or whatever the state else needs.

What exactly would be smart about holding this?

They'd have access to an asset that's highly valued, finite, and has the properties to serve as a future international reserve currency. It's a hell of a geopolitical "poker chip" to have fall in your lap.

It's not a unique opportunity in any way, if the German government somehow decided that it would be awesome to hold $2B or $20B of BTC, they can simply buy it at any time.

Right now. As the supply dwindles, the ability to supply that demand will decrease dramatically. If you got it for free in a seizure, there's zero downside to just hold it and forget it until later (when, ironically, the government sends your own fiat currency into a hyper-inflation event).

The government can simply print real money any time they want (or lean on the European Central Bank in the case of Germany). Why would they want to hold a useless tchotchke instead?

Printing money doesn't increase the amount of money in real terms.

Yes, it does. Because then there is more money.

Economics 101 might be a good idea before engaging in economics discussions.

Because that "useless tchotchke" is going to be a life preserver for their government when the boat they've been shotgunning holes into the side of (their own currency) for 60 years finally sinks.

Yes, one day in the future we will find a use for bitcoin finally. It has been 15 years and we still don't have a really great use case for it but it will happen.

There are plenty of use cases for Bitcoin, this is just FUD.

Sure there are plenty of use cases but no real significant traction for the everyday consumer. Price fluctuation is wild, would hate to have this has a "currency" that I hold to pay the bills. Even ignoring the volitility, the transaction costs historically have been high enough that it is not attractive from the consumer lens. Not FUD.

Yes, the Gouvernement could use this „money“ directly to pay it‘s bills. Oh wait, it can‘t…

It’s a deflationary currency. No one is incentivized to spend it.

Deflation doesn't mean there's no incentive to spend. It means there's a slight relative reduction in the incentive to spend. You can argue that it's still bad, but it's a very different thing.

If the value of the reserve money is $2b one year and it deflates to $3b the next, does that mean you can print more fiat every year? Sounds like an attractive proposition to me

If you got the money with zero energy expenditure, you don't care what the current fiat market value is. It's like finding a free lunch sack of cash on a park bench.

You could argue that there's an opportunity cost to letting the money stay parked, but because governments ultimately dictate the value of their own currency, that point is moot.

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