USDT - A fundamentally fucked up situation.
Fellow Cryptopians:
As many of you will have heard, Tether (USDT) made the decision to dissolve their relationship with audit firm Friedman LLP earlier this week. In an attempt to justify their actions, USDT stated that due to the “excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame” (Coindesk).
For a company that has come under increasing pressure to validate their claims and been subject to allegations ranging from insider trading, deceiving clients, and deliberately inflating prices for personal gain, Tether’s decision is inarguably, a bold move. A decision, however, that has clearly backfired with the CFTC (US Futures Trading Commission) having filed subpoenas for both Tether and Bitfinex; a well-known exchange closely affiliated with Tether.
It is alleged that Tether has been deliberately inflating the price of Bitcoin by posting buy orders well above market average. These orders, however, were never filled. Instead, as market prices rose to meet perceived buyer demand, the orders were suddenly cancelled. Inevitably, investors following the hype were left holding artificially inflated bags of nothing whilst those orchestrating sell their holdings for massively unsustainable ROI (return on investment).
What does this mean?
FUD – that’s for sure. The effects of which are already evident with BTC prices today having been forced below the $10,000 support line, a position not seen since November 2017. Compounded by uncertainty of South Korea’s continued presence within the market and the fear of governmental regulation – this is something the cryptocurrency is not equipped to handle at this time. And to make matters worse, bitcoin is rapidly losing favour on dark market platforms which, until recently, had been some of the currencies strongest supporters. (Oh – and if you don’t think the dark market makes up a significant enough percentage of the overall market to have any real impact on the price, you are sadly mistaken. Earlier this year Talis Putnins and Jonathan Karlsen, professors Sydney University’s school for Buissness Technology claiming that a whopping 47% “almost half of all bitcoin transactions involve illegal trading either directly or indirectly on the dark web” (deepdotweb).
The truth, however, is that at this stage – no one really knows what will happen. I feel as if the entire cryptocurrency sphere is at a crossroads. What happens next… well, that’s really up to the community isn’t it?
Please note, any and all information published on this blog is an expression of my personal opinion and in no way reflective of broader community sentiment. Further, I would like to inform all readers that the contents of my blog are the result of fundamental research and analysis. I have no more insight than the next person nor am I privy to any information not accessible to any member of the general public. Put simply – the content is my personal opinion and based on nothing more than observable phenomena.