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USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes!

Currencies / cryptocurrency Jul 30, 2021 - 03:27 PM GMT

By: Nadeem_Walayat

Currencies

To get my crypto bear market investing ball rolling I recently opened an account with Binance (10% trading fees discount link). Deposited £3600 sterling that I quickly converted into USDT so as to initiate my initial limit orders on mainly BTC and ETH, aiming to add more funds and limit orders over the next few weeks. Unfortunately on taking a closer look at USDT Tether stable coin which probably holds true for most of the other so called stable coins, I find that USDT is NOT backed 1 for 1 by that which it seeks to represent i.e. from what I have gleaned at best USDT is backed by 75% of dollar 'safe-ish' assets with most of the remaining 25% may not even exist i.e. PRINTED MONEY! Likely to cover losses incurred to date such as the $800 million USDT's parent company lost some years ago etc,. So USDT's true value is somewhere between 15% and 25% LESS than that of the US Dollar given it's actual reserves as I covered in my recent video, and the backing could be far worse as exchanges use USDT to allow traders to trade on margin and thus are vested interests in perpetuating this scam.


SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros

The black swan event here is clearly that USDT and the other Stable coins could spectacularly FAIL and trigger a collapse in the crypto markets as investors see their USDT values evaporate overnight whilst those who's exit plans relied on stable coins in times of market panic are left, well panicking as they are stuck in crypto's so panic even more as they fear exchanges imploding along with their crypto balances.

Stable coins current market cap is $104 billion, most of it in USDT $64 billion and USDC $22 billion, thus are more than capable of creating a financial crisis 2008 style event for the crypto markets. That should they collapse would result in a loss of confidence in all crypto which could easily take Bitcoins price down by 85% from it's peak to say back under $10,000 with worse for the other crypto's! A true bursting of the crypto bubble in spectacular style, a risk that most crypto maniacs with their DIAMOND HANDS HODL mantra remain oblivious to.

Furthermore printing money i.e. USDT allows for MARKET MANIPULATION! as USDT can just print dollars out of thin air then buy crypto to send prices soaring and thus generate artificial profits with printed US Dollars used to push up the price of crypto holdings, it may have worked during the 2021 bull run, but it is an ultra case of the "Emperor has No Clothes" all whilst the crypto fanatics talk about Crypto's being safer than Fiat currency that is being constantly devalued via central bank money printing. In fact Tether is behaving just like a CENTRAL BANK for the exchanges i.e. prints currency (USDT), unredeemable, manipulates market prices, allows traders on exchanges to leverage themselves upto their eyeballs upto X100, so much for crypto's being decentralised finance!

In fact Tether exploding is not a question of IF but rather WHEN! And the exit door is going to be pretty small. So at the very least understand that there are NO STABLE COINS, they are UN-STABLE COINS! No matter what they state on their websites etc they are ALL UNSTABLE due to the fact that if USDT fails then they will ALL FAIL, just as when Lehman Brothers failed ALL the banks FAILED! And this time there isn't going to be any central bank stepping in to bailout out the crypto world. IN FACT, I would be surprised if the central bankers are not already aware of this and could be game playing a collapse of the crypto space so that they can step in and seize control of the crypto markets through strict regulation to prevent anther Tether style collapse of the market.

Meanwhile all of the exchanges use the Stable coins as a means of sucking fiat currency into FAKE unstable equivalents which gives retail investors the illusion that they are holding for instance dollars when they are in fact holding something akin to mortgage backed securities and we all know what happened to those!

Seriously folks the more I look under the hood of Tether the more I am convinced that a chain reaction of events could result in a sudden loss of confidence in USDT that would result in a collapse of the whole crypto market within a matter of hours.

USDT is 9-11 for Central Banks

The central banks cannot allow independant currencies to circulate in any meaningful amount regardless of the advantages of the blockchain. SO, turning a blind eye to the USDT ponzi scheme on expectations that it WILL implode and thus allow the central banks to step in and REGULATE the exchanges and to some degree crypto currencies in the name of preventing such ponzi schemes in the future form collapsing crypto markets explains why USDT has got away with it to the extent it has. The central banks full well understand what's going to happen and so are turning a deliberate blind so that in the aftermath they can wage their war on crypto without much resistance from a devastated crypto market and without any cost as unlike the banking system they do NOT have to bailout the crypto shadow banks i.e. a collapse of Tether will have NO effect on the banking system so let it grow until it takes down the crypto markets. Which is a another reason to be careful in how much one has deposited on exchanges and not just held in USDT. Investing in crypto's IS VERY HIGH RISK!

This article is an excerpt from my extensive analysis of the crypto markets including a detailed Bitcoin price trend forecast has first been made available to Patrons:

Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels

  • Investing in the Tulip Crypto Mania
  • Bitcoin Price Trend Forecast Review
  • Lessons Learned
  • Cathy Crypto Wood's View on Bitcoin
  • BITCOIN HALVINGS TREND TRAJECTORY
  • Stock to Flow Infinity and Beyond!
  • Bitcoin, Crypto's and the Inflation Mega-trend
  • Black Swan 1 - Will Crypto's Get Banned?
  • Black Swan 2 - GOOGLE
  • Black Swan 3 - USDT Tether Un-Stable Coin Ponzi Schemes!
  • BLACK SWAN 4 - Bitcoin 51% Network Attack by China?
  • Black Swan 5 - Bitcoin is Already Obsolete
  • US Trending Towards Hyperinflation
  • BITCOIN TREND ANALYSIS
  • Bitcoin Bear markets analysis - How low could she blow?
  • Bitcoin Trend Forecast
  • Bitcoin Long-term probable Next bull market price target
  • Alternative Scenarios
  • My Crypto Bear Market Investing Strategy
  • Crypto 1 - Ethereum (ETH) $2600
  • Crypto 2 - Bitcoin $40,375
  • Crypto 3 - Ravencoin $0.078
  • Crypto 4 - Cardano $1.59
  • Crypto 5 - Pokadot $25
  • Crypto 6 - ChainLink $26
  • Crypto's 7 to 10
  • Creating The Perfect Crypto
  • How to Invest in Crypto Without Getting SCAMMED
  • CHIA SCAM COIN
  • Binance vs Coinbase
  • Have ARK Invest Funds Bottomed?

Which was first been made available to Patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

For crypto trading and investing see Binance for 10% discount on trading fees - Discount Code LZ728VLZ

For managing your crypto's see Coinbase

For GPU mining check out Nicehash (affiliate links).

Whist my recent in-depth analyisis warned of the risks of Financial Crisis 2.0 - Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH!

My analysis schedule includes:

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your crypto's investing analyst.

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2021 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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