Fast & Furious, Tether Printing Press Issued $400 Million in last Four Days
January 20, 2018 6:31 am
Tether Printing Press Issued $400 Million in last Four Days which is Fast & Furious
Nowadays, bitcoin is actually having the hard days. At its lowest point, the cryptocurrency has fallen to $9,200 even before running towards the safety five figures. The release of $100 million worth of Tethers surrogate the US dollars and it was followed by another $100 million issued for the next three days in a row. Tether is holding up the bitcoin market as of now. but what happens while the dance stops? Should regulators dive in or Tether shut the shops, the loss of fresh capital could be disastrous.
Tether, is it a Savior or offender?
The bitcoin identity has strongly mixed feelings on Tether. On the one hand, this artificial fiat currency is instrumental in shoring up prices. But if that supply line were to be cut off, the crypto markets would be weakened by new money. While Bitfinex, which regulates Tether, is in charge of issuing these dollar-pegged tokens, other exchanges are also reliant on them including Kraken and Bittrex. What happens to Tether affects everyone.
The number of new bitcoins created each day is worth approximately $18 million. Miners require selling most of these coins to cover their service costs. This means that $18 million of new money wants to enter the markets daily just to keep current prices. $400 million of tethers has been issued over the past four days, and yet the price of BTC has remained slow, this is dangerous. If it wasn’t for tether’s flood of newly created cash, this week’s fall would have cut deeper still.
Don’t Stop Trusting
In simple words, the acceptance of tethers serves as a form of quantitative relieve that keeps the markets ticking over, even amidst negative news and regulatory difficulty.
As one commenter pointed out:
“Tethers aren’t really ‘backed’ by USD fiat, but rather by confidence in Bitfinex itself. Similarly the USD isn’t ‘backed’ by hard assets, but rather confidence in the US economy. What happens to USD if the Fed shuts off the insane volume of their printing press?.”
Look out the Child
Tether is considered like a real dollar and works like a real dollar – at least until the time comes to cash out. In the past month individually, more than $1 billion of tethers have been issued. If Tether doesn’t hold a corresponding amount in its bank, the whole house of cards could come tumbling down, destroyed by a changeling swaddled in the mantle of the US dollar.