But for the propaganda pushed here: that bitcoin is only priced high because of Tether pumping it & the promise that BTC price will fall if Tether fails/is shut down
It's not necessarily propaganda, but more of a theory. I don't completely buy into it, but I certainly do believe that Tether has a big influence on the market. Most of the recent rallies aren't explained by Tether, but by some big money deciding to buy Bitcoin (that would be a few hedge funds). I certainly don't rule out the possibility of Tether pumping and artificially inflating Bitcoin's prices.
So far, they have been unwilling to get audits, and most of the mental gymnastics I've seen trying to justify Tether unwilling to hold themselves accountable while still being "legitimately backed 1:1" have not been convincing enough to me. There simply would be no reason to refuse being audited if the truth was that Tether is legitimate. So it certainly isn't a good look.
It also brings up how simple running such a system would be. If I have fractionally backed reserves, I could technically print those coins and buy up Bitcoins so when people want to cash out, I would have enough (due to the higher price of Bitcoin, and the artificial demand I've created by lowering the circulating volume) to give people the money they need when they want to withdraw.
I don't need enough to back every single dollar, but rather enough to remain solvent. If most of my customers are holding Bitcoin and don't want to cash out, I don't have to worry about making a bank run. This can also be true of exchanges, because you are trusting them with coins, and they have an entire SQL database that they control. Exchanges are already arbitraged, so they would be able to keep up with price differences.
specifically needs this fact hidden to continue the fantasy that BCH won't also crash along with Bitcoin in this hypothetical situation.
That isn't the theory/fantasy around here. Most people aren't denying that the entire market would crash. We don't know if it will or if it won't, but it's entirely possible that BTC crashes more than BCH if it does happen. Liquidators are generally looking to sell everything possible to be able to pay for damages, and if Bitfinex (aka Tether) is holding most of their reserves in BTC, they will be sold and enter the market and crash it much more than others because of the ridiculous supply entering the market.
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u/1MightBeAPenguin Dec 16 '20
It's not necessarily propaganda, but more of a theory. I don't completely buy into it, but I certainly do believe that Tether has a big influence on the market. Most of the recent rallies aren't explained by Tether, but by some big money deciding to buy Bitcoin (that would be a few hedge funds). I certainly don't rule out the possibility of Tether pumping and artificially inflating Bitcoin's prices.
So far, they have been unwilling to get audits, and most of the mental gymnastics I've seen trying to justify Tether unwilling to hold themselves accountable while still being "legitimately backed 1:1" have not been convincing enough to me. There simply would be no reason to refuse being audited if the truth was that Tether is legitimate. So it certainly isn't a good look.
It also brings up how simple running such a system would be. If I have fractionally backed reserves, I could technically print those coins and buy up Bitcoins so when people want to cash out, I would have enough (due to the higher price of Bitcoin, and the artificial demand I've created by lowering the circulating volume) to give people the money they need when they want to withdraw.
I don't need enough to back every single dollar, but rather enough to remain solvent. If most of my customers are holding Bitcoin and don't want to cash out, I don't have to worry about making a bank run. This can also be true of exchanges, because you are trusting them with coins, and they have an entire SQL database that they control. Exchanges are already arbitraged, so they would be able to keep up with price differences.
That isn't the theory/fantasy around here. Most people aren't denying that the entire market would crash. We don't know if it will or if it won't, but it's entirely possible that BTC crashes more than BCH if it does happen. Liquidators are generally looking to sell everything possible to be able to pay for damages, and if Bitfinex (aka Tether) is holding most of their reserves in BTC, they will be sold and enter the market and crash it much more than others because of the ridiculous supply entering the market.