Is Bitcoin going down?
The crypto currency market relies heavily on a stable coin called Tether.
Especially Bitcoin.
Tether is mapped 1-to-1 with the US dollar and enables traders to come in and out of Bitcoin quickly and easily.
The reason Tether is important is because it's issuance has ballooned recently from $2b in June 2019 to $35b as of today
To give you a sense of prospective that is the same as Oracle has in cash reserves.
Teather's history has been a murky one which involves:
- Using banks banks in Taiwan to avoid US KYC and AML laws.
- Using Nobal Bank in Puerto Rico after Wells Fargo refused to work with them in 2017
- Not being audited in it's history (but issuing memos like this and articles like this to ensure users that their funds are actually backed)
More recently the New York AG looked in to Tether and issued a paltry fine in February this year for $18.5m. While the market has seen this as good sign (as Tether can now go back to printing more digital money), many observers have over looked the fact the company is now required to submit quarterly reports to prove that they have the reserves. This means that Tether's parent company Bitfinex will be looking to fill the gaping hole in it's books over the coming months. And how is it going to do that? Well sell other assets to generate legitimate cash. That means selling Bitcoin.
May be Michael Burry was right in his most recently deleted tweet.
https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
https://medium.com/@CarpeNoctom/bitfinex-and-tether-the-good-the-bad-and-the-ugly-6f615c6d79a3