This doesn't look good. Some people are sounding the alarm that Tether (USDT) is being used to artificially prop-up the price of bitcoin. Seems something similar (using Fiat) happened back in 2013 with a trading bot:
"a trader dubbed ‘Willy’ bought Bitcoins from traders by ‘crediting’ the sellers’ accounts with fiat currencies that, in many cases, could not be withdrawn."
This article details how Tether is operating as a fractional reserve and is being lent out by Bitfinex for margin trades:
>Some people are sounding the alarm that Tether (USDT) is being used to artificially prop-up the price of bitcoin These people are retards who sold at 1k or the bottom of the china fud dip. Tether is fine and poses no threat to the market regardless of what baseless bullshit conspiracy theorists throw around.
Jayden Cook
These people genuinely believe that Willy and Markus could never happen again and will never happen again even though there is every reason that it should happen again. This is what delusion looks like.
not working very well either. It's kind of pathetic how much energy is being expended on this with so little result, actually.
Jacob Sullivan
Can someone explain how bitfinex crashes if no one can withdraw fiat from it? Say USDT goes to 0 and gets delisted everywhere... so what? How does this impact anyone who isnt holding USDT? I always just thought of it as a convenient peg for trading and hedging purposes, not as real US$ for long term holding. Lots of currencies around the world are pegged to the $ at a fractional reserve basis, most of the Carribean for example, but no one thinks Aruba $s are US$s.
