you do realise that USDT is Tether you stuck in your confirmation bias. Once again, it is really easy to keep the price up and push it higher with fake money. Not sure why such concept is hard for you to understand. Remove Tether and 70% of daily Volume is gone. Crypto world would plummet as prices are artificially supported by this ponzi stable coin.
They claim the ban is to "protect" the Chinese people. From what exactly is unclear. Also, China's been banning cryptos time and again for years now, it hasn't taken all that much.
Wow, you definitely got me that time, good job buddy You're right I don't understand it. And that's because you haven't given a clear logical explanation about how teethers inflate the price, when Bitcoin is also being bought with USD. It's like you read something on the internet that stuck in your head that you all of the sudden need to believe but don't understand the concept. If the price of Bitcoin is moving up then that's because people are buying Bitcoin, not Tethers. I don't see how you think tethers control the price of Bitcoin, maybe someone told you what to believe, or maybe I'm wrong and don't understand it. I just think your idea is too far fetched since Bitcoin can be bought with any Fiat money as well...
Not a trade recommendation.... but if I were trading btc I'd swingtrade SHORT 39.8k cover stop 40.1 exit target COVER 31k. Watch Is there an inverse btc etf? If China is out bitcoin and crypto are royally fcked near term. China looked at btc, grabbed its crotch and said niehau ma this, mfkr lol Somebody make a meme
Here is a very good analogy. Say you have an ETF like SPY. When you buy SPY, you own a share of this ETF that has all the underlying shares in it. The fund, which is now at 400 billion, will have shares of all the 500 companies in there plus a few million of cash for redemptions and operating costs. But the bulk of this is in the shares of the companies. When someone buys SPY, the fund needs to ensure that they add more shares of all the companies. Clearly one extra share makes no difference, but if over months the fund grows 10%, they need to add more shares and buy them on the open market. Conversely, when people want to get rid of their SPY shares because they think the market will drop, the company will have to sell individual shares of the companies to maintain a balance and when they sell shares, the dollars they get for the sale goes to pay out the people who sold. USDT works the same way. When someone wants to buy a USDT coin, the company has to ensure that for the coin they sell, they have 1 $US dollar in their account (just like SPY needs to own the shares of APPL, MSFT, etc). Then they can mint the USDT coin. Now clearly someone can exchange USDT for BTC, and in this case, they need to make sure they have some BTC on hand for this transaction, but at the end of the day, most of their holdings need to be in USD because each USDT coin is supposed to be backed by dollars. So the idea is that if there is 60 billion circulating in USDT, there should be 60 billion in US dollars on hand. Now they can use some of this money and invest it, which is clearly what they claim to do, but we all know investments can go south. If they bought 10 billion in shares of that Chinese developer Evergrande that is going bust, well, we have a big problem, and hence why they came out very quickly do say they don't own it. Every day you have people exchanging USDT for BTC, and BTC for USDT, so there needs to be enough on hand of both to make this transaction happen. The thing is, what if all of a sudden, half of USDT holders want to get out of the stablecoin. The company will need to sell 30 billion of their investments in order to get the US cash in order to be able to do the exchange (since they only have 3% of cash on hand). Since we don't know where the money is invested, we don't really know if this redemption is possible. Now comes the kicker. Did 60 billion dollars worth of cash get converted to USDT in order to initially mint the 60 billion stable coins? There should have been this much cash flowing in, in order to maintain the 1:1 peg. The money may not all be in cash now, but it should have started this way. Heck, maybe there is even more if their investments paid off. But if the company just releases 10 billion coins, with no money coming to them, then they clearly can't be minting those coins because there is nothing to back them up. We don't even know what types of investments they own. If its all shit bonds that are losing money, there is a big crisis if everyone wants to convert USDT into BTC or USD all at once. Its almost no different than what Madoff did. He sent you a statement to say your portfolio has this much money in it because he bought X amount of shares on your behalf. But in fact, you don't own any shares since he doesn't have them. Its just a piece of paper with words on it. Likewise, the company behind USDT says that since there are 60 billions USDT coins, there is 60 billion US dollars (or equivalent) to back up those coins, but maybe there aren't. Just because they say they have it doesn't mean its true, and there is no way to check. We are just supposed to trust them.
Oh, and I forgot the crypto price inflation part. Here is how I see it. Suppose you're at an auction. You bid 10 million for a painting, the guy besides you bids 11. Then you bid 12, and he bids 13. Eventually you get it for 20 million. But then you find out the guy never had any money and he should have never been bidding. You could have gotten it for 10 million, but because of his fake bids, it got to 20 million. Somehow he managed to trick the auction house into making them believe he has the money when he didn't. Since USDT might just have been printed out of thin air, its easy to use it to buy BTC, and you can print as much as you want. They say they have a dollar for every USDT coin they bring into existence, but if they never received this dollar, then its a scam. If with just a few million of USDT coins you can move the price of BTC by thousands of dollars in minutes, then billions worth can have moved BTC from 10k to 20k and so on. If you don't have a fake buyer with unlimited fake resources, then what is a BTC coin really worth? People maybe mostly buy BTC because they see it going up. But if it didn't go up because there were no transactions done through fake USDT coins, then maybe the price would have never risen.
You have to wait until Btc hits $39.8K before shorting? You can short GBTC Or BTCC.TO (Canadian bitcoin etf) dyor, of course Do let us know if you put on a short btc trade. It's always nice to see bitcoin critics that actually put their money where their mouth is
I think China will not giving room for crypto grew up in its country, but there are so many founders crypto comes from Chinese, the government will issue digital yuan and may be worried crypto will create instability.
Mutual funds might work that way, but ETFs are different. https://www.etf.com/etf-education-c...s-the-creationredemption-mechanism?nopaging=1
Interesting link. On a macro level, its very similar, except for the AP middleman. But what I find interesting is this line with regards to costs of trading that are covered by the AP.... "The beauty of the system is that the fund is shielded from these costs." If the AP is the middleman that acquires individual stocks, why on earth can't the ETF do this for a smaller price? Any time you have to pay the middleman it costs something. They state that the AP is happy because it receives ETF shares they can sell for a profit, but this profit would be better kept by the ETF in my opinion. The service provided is basically what the ETF should be doing. If I call my broker to perform a trade, they will charge me $50 to deal with a person. If I do it online, I pay $4.95. So why use a middleman??? (maybe only if the platform is down and you want to do a trade) At any rate, its just one extra step to jump through. But the part about taking in money, buying shares of individual stocks and then creating more ETF shares is basically the same.