Bitcoin dr doom

As far as they are concerned, they are buying dollars, and they are paying 0.

1. On a year-to-date basis, Bitcoin prices are up over 113 percent.;
2. Dr Doom Calls Bitcoin Cash [BCH] a Shitcoin in a Debate With Roger Ver.
3. Analysis: Dr Doom Needs to Take a Class - CrossTower.

Both parties see themselves as buying and the other person as selling, because they are both using their own currency as their frame of reference. Yet the trade gets executed all the same. Now that we have that settled, we can move on to Tether, which is a stable coin backed by USD fiat currency.

Tether operates like many ETFs, where there is a creation and redemption method. They then hold that USD in escrow. If you have Tether and you want to change it back to USD, you hand them your coins, and they essentially retire those coins and hand you dollars from the escrow account. Now, there are currently a lot of questions around if the company that is operating this is actually allowed to do it. I will leave that discussion for another time and place, as I am not an expert here, and regulations are still being formulated.

The important part for this discussion is that Tether in fact acts as a crypto version of the US dollar. All markets everywhere trade in pairs, as we discussed earlier. What this means, is that every time someone sells BTC on a global crypto exchange, they are explicitly buying Tether at the same time.

The person taking the other side of that trade is buying BTC, and delivering Tether. This means that when sellers start to flood the BTC market, it implicitly creates a need for more Tether.

Market makers on the other side of these trades need to keep their inventory of Tether high enough so that they can continue to make markets and keep doing business. So they go to the Tether administrator and deposit actual US dollars with them so that they can restock on Tether, transfer it to the crypto exchange, and continue making markets.

So, we can see that, given the way that crypto markets are structured, the fact that there will be spikes in issuance of Tether during BTC market selloffs is both obvious and entirely necessary for these markets to function as intended. It is clear and basic math or physics to see that BTC price movement is what dictates the creation or redemption of Tether, and not the other way around. As if some phantom mastermind was controlling your savings account, and their manipulation was what caused that new pair of shoes to appear in your closet.

Roubini is a smart guy; he knows better. He should stick to the real arguments and leave this nonsense behind. CrossTower Inc. Economic Calendar. Retirement Planner.

Running for the Hills

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