Manage episode 197420698 series 1080005
The markets are down. The downward trend has continued as the markets have fallen across the board. Partly the blame is the fear uncertainty and doubt created when India’s Finance minister, Arun Jaitley, mentioned a Bitcoin crackdown in a speech. Emotional traders quick started a sell-off at the mere idea that an Indian ban would soon follow. In the speech the Indian minister commented how bitcoin was not legal tender and that the government would be pursuing individuals who used the digital currency for illicit activities.
Much of the downturn can still be attributed to the Bitfinex and Tether fiasco. News reports are finally putting the pieces together and asking if the price of Bitcoin SegWit has been propped up by tether printing. More and more people are waking up to the fact that USDTether has some serious issues. One bit of trouble comes from the fact that exchanges dominate the USDTether rich list and will be left holding the bag if they can’t get their tokens exchanged for U.S. Dollars.
Media outlets like the New York Times are begging the question: is the Price of Bitcoin SegWit propped up by tether printing. A new website called TetherReport.com has looked at market activity surrounding the issuance of tethers and concluded that:
“Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet.”
So what’s next?
It really is left in the hands of Bitfinex and Tether CEO Jan Ludovicus van der Velde. If Tether can come clean about the actual status of their backing bank accounts their may be some graceful exit possible. Given that the Tether website and twitter account has been silent since January 5th, it doesn’t seem likely.
Following the current trend I expect that all the markets will continue to fall as Bitcoin Segwit see prices drop to the $3-4,000 range and then perhaps even lower. While that is doom and gloom talk to some people it would bring the price of bitcoin back down to earth and more rational levels. The lightning network has been as anti-climatic as expected and there may be many more months of development needed before it is ready for primetime.
To clarify things for you. Bitcoin SegWit cannot simply be a store of value if the price does not keep rising. The price seems to have been manipulated higher by Tether and Bitfinex. The curtain is coming down and bringing with it the irrational value of Bitcoin Segwit, which may I remind you, is the slowest and most expensive cryptocurrency for sending money.
While this will cause some sadness in the overall marketplace, the sooner tethers are removed from the game, the better.
Bumper Music: The Pirate And The Dancer by Rolemusic: http://freemusicarchive.org/music/Rolemusic/The_Pirate_And_The_Dancer/04_rolemusic_-_the_pirate_and_the_dancer
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