Re: FTX
Posted: Fri Dec 15, 2023 4:42 pm
There has apparently been an academic argument about whether Tether issuances push up the bitcoin price. Some academics published a paper in 2020 claiming that happened, at least in certain market conditions, and further argued that this was market manipulation. But their stats were criticised. Subsequent research in 2022, it was said, did not bear out the point. But the point that was not borne out the 2022 research, at least in a technical sense, was that it was deliberate market manipulation. For it seems that it was tweets from a particular news source about Tether issues that pushed up the bitcoin price, not the issues themselves. Which seems like a rather fine distinction, shall we say, to me.Holylol wrote: ↑Fri Dec 15, 2023 3:51 pmAnother possible explanation, that simply involves... more fraud:
https://davidgerard.co.uk/blockchain/20 ... to-bubble/
When I first read that the 2020 paper was discredited, I wondered whether Gerard was peddling discredited bollocks. But on reflection and seeing what was really discredited, actually it seems that it's a good point.
Of course traditional bankers issue loans on a reserve ratio basis, which is just the same printing money from air, except that the reserve ratio means that only 88% of it is from the air, assuming a reserve ratio of 12%, which is the present UK minimum reserve ratio for banks. But proper banks are properly regulated, and crypto isn't.
And the claim of stablecoins is that they are 100% backed by actual dollar denominated liquid assets. But loans are not liquid assets, even if collateralised. That's what traditional banks do, turn the illiquid into liquid, and is the reason why traditional banks are at risk of runs. And crypto as collateral is a bit of a joke. You'd never get proper bankers to accept that, but crypto lenders could hardly deny it I suppose. Doubtless there are margin calls when crypto prices wang around, but they'd just be putting up more crypto.
The whole Wiki article makes Tether look very smelly.
And Gerard's point about crypto advocates running rings around journalists must certainly be true.