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RE: CRYPTOCURRENCY MARKET PROBLEM: EVERYTHING IS TIED TO BTC

in #cryptocurrency • 7 years ago

How do you feel about a coin like Tether, where its goal is 1 Tether = 1 USD?

I thought maybe this is what you were leading to but you never mentioned it. Barring all recent controversies aside, Tether is interesting because it is one of the only stable crypto currencies, which makes it capable of protecting you in bearish markets should you swap into it.

7 years ago in #cryptocurrency by
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     7 years ago (edited)

    Good comment yes! I spoke about Tether in a previous article:
    https://steemit.com/cryptocurrency/@maxdigi/many-questions-arising-about-cryptocoin-tether-and-bitfinex

    I do feel Tether is a good way of protecting yourself in a bearish market but I have not used this method myself as I don't trust this solution.
    It is not sure whether every Tether is being backed by a US dollar and this kinda worries me as a lot of people in the cryptocurrency-space are saying Tethers are being pumped into Bitcoin by Bitfinex.

    The reasoning is kinda simple if you put it like this: For Tether to remain around a price of 1usd, more supply of tether needs to be created when the demand for tether increases (in bearmarket mostly), otherwise the price of tether would increase. Now if the demand for Tether decreases again (when markets are going back into bullphase), the supply of tether needs to reduce again or the price would get cheaper than 1usd.

    So there is this theory that everytime the market goes in bullphase Bitfinex is also pumping Tether into bitcoin, creating fake value for bitcoin. I definitely would love to hear your opinion on this!

    Thanks for your comment.

    Cheers

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