BIG NEWS! Tether Is Backed By USD According To Report
I was expecting a bit of a crash in the market from the hacking news but was surprise to see it has recovered and gone up. Then I read the big news coming from tether. A law firm has released a report that the 2 plus billion dollars of tether is backed by over 2 billion dollars of USD. This was the promise of the coin and what makes it pegged to a dollar. But there were questions that the company might not actually have the money they say they did. There was also reports that they made more tether to inflate bitcoin prices. If this report is true then we have a positive answer to both of those claims.
Now it does not 100% clear tether. The report was done by a law firm and not an accounting one and it only shows that tether has the funds on the day June 1st. Which means it could have inflated prices earlier or have spent the money since. But still, the fact that they can report having that money in their account is a big deal and adds a sense of relief to the crpyto community. Why? Because if tether goes under it is taking a third of the market down with it.
But this also leaves the question of where is the market going now? The verdict of bear or bull is still be debated.
Here is the link for more info:
https://www.coindesk.com/tether-review-claims-crypto-asset-fully-backed-theres-catch/
I'm from the accounting side and I think we can never be 100% certain that tether is and will remain backed by USD.
And besides the scam/fraud possibility there are other risks. About scam/fraud you already mentioned someone could take the money tomorrow and in the beginning no one will know that.
But I also wonder how will they pay any bill? Or are there really no costs to keep tether working?
(Sorry I really don't know anything about that coin)
I think I would say the credit risk (I think that's how we call this) is the biggest risk. Let's assume they have this 2 billion divided over 5 banks. That's an average of 400 million per bank. If one bank goes bankrupt the whole 400mln will be at risk. Most likely the biggest part of the amount will be refunded, but that could take years. And what happens if that causes is to lose fade in tether?
Finally a good news before going to bed. What else do we need for a sound sleep. 😊
To listen to the audio version of this article click on the play image.
Brought to you by @tts. If you find it useful please consider upvoting this reply.
tipuvote! :)
This post received 0.62 SBD upvote from @tipU funded by @cardboard | @whatageek now has a chance to win free @steembasicincome share :) | For vote buyers | For investors.
Apparently the study was carried out in part in December. It would have caused chaos if it was actually found to be fraudulent but the good news was a non story.
Perhaps part of the Buy the rumour/sell the news crash in December as it was news.
I love it though and my accounts on USDT exchanges don't make me quite as nervous as before.
Very true about Tether. Implications here are still massive for the market. Watch this space. Don't think people are still v. convinced. I wouldn't use it as a hedge. I'd use fiat at this stage in the game.
I don't think there's a major bull run in site for now. Too much negativity. We need to crawl back up, but we can still go down.
Btw @whatageek , what do you make of this post on this crypto-game? be glad to get your view.
This is good news for the cryptocurrency community, where fear for a complete meltdown due to the risk of Tether not having the fiat backing that has been claimed. Seems the concern can end now, and unleash the awesome potential cryptocurrency and blockchain has, especially within transferring value between two people. At Blockbasis we are a bit fanatic about transactions within cryptocurrencies like BTC, ETH and LTC, as we allow our users to send and receive cryptocurrency via email. We do this to make it easy to send and receive cryptocurrency, making it as easy as sending an email!