It all began with the publication on Bloomberg analytical articles, which the authors suspected the crypto currency exchange Kraken in manipulation Tether. Article, the reaction of the Kraken and the topic of fraud with quotes USDT gradually drawn into the discussion more and more fans are secured by U.S. dollar cryptocurrency, skeptics and all the rest.
Bloomberg came to the already controversial subject in a rather provocative manner. After analyzing the data of trading operations with Kraken USDT, they’ve found some “disturbing calls”.
The article says that the findings deny all the laws of supply and demand — suggesting the washout trading when a certain group of participants trading only within themselves, creating the appearance of high demand.
The authors analyzed 56 000 user operations Kraken (time — eight weeks). Modesty aside, skeptics claim that journalists made “a deep dive into suspicious betting structure” that clearly shows “why institutional investors keep their money out of the market.”
This really profound analysis of the suspicious structure of trading on the cryptocurrency exchange Kraken held @mattleising. In the past the CEO of Kraken ridiculed the idea of control over the manipulation of the market.
Really interesting article — who’d have thought, what is happening with cryptocurrencies? Great stuff, @mattleising — I bet my friends in the [crypto]opposition not surprised. #CryptoKarma #FraudIsFraud #ReadTheCryptoLawsuits
Yet another illustration of why the institutional investors keep their money away from the market
Release The Kraken
Ironically, Bloomberg from a third-party investigator to fully become the object of debate.
Sunday in the blog of the Kraken was published as a critical post that points to the fallacy of the reasoning of the journalists who worked on the article. Ironic comments from the exchange appeared in the title: “about Tether: journalists deny the laws of logic and cause great suspicion” (eng. “On Tether: Journalists Defy Logic, Raising Red Flags” — approx. CoinMarket.News). According to representatives of the Kraken, the authors did not have sufficient expertise to cover this topic:
“It is scary thinking that our legislators read this. The title really was sensational and certainly attracted a lot of readers; but what about those who don’t follow the heated debates on Reddit and Twitter? What about those who rely on the objectivity of journalists and the expert knowledge of their sources?”
Kraken and it was supported with varying degrees of tact.
Maybe you should write news about what you understand your quality rating below zero.
I in any case do not protect Tether, but the authors show a striking ignorance regarding the operation of financial markets.
Some go to the person it has not done. Commenting on the conclusion of journalists that the high demand for USDT among users Kraken had to adjust quotes cryptocurrency to $1.10, a redditor under the name Chaos_Elephant noted that created arbitrage opportunities keep the cost at $1:
“Of course we do not equate the rejection rate USDT [in relation to] USD $1 to a discount or a premium to the terms of the exchange of cryptocurrencies to USD on Bitfinex. Offer USDT for $1.1 — it’s like a discount of ~10% on Finex. It is not too difficult to understand.”
And yet critics Tether these arguments did not convince.
Of course, the Kraken, something that cost $USDT more stable than 10-year Bund, the most reliable financial asset in the Land, any person with at least half a brain would raise the question how such a magic Tether rewrote the laws of Economics. “Because arbitration” is not the answer.
1 / I’ll translate.
- Stability USDT due to the arbitration and the structure — “We know that it’s all a wash-out trade and bots”
- USDT trading on Kraken— a small market — “a small Amount, so you should not worry about it. Pay no attention to the fact that it is the only market [pair] USDT/USD”.
Compromise
Despite the fierce debate, advocates and critics Tether agree on one thing: not all transactions involving the asset subject to the flow of human greed.
If we assume that a certain amount of USDT flows into the markets and the bots, on the other hand, redeemed them to preserve the ratio with the U.S. dollar, suspicious orders and their frequency are beginning to make sense.
Another Reddit user said:
“While there is an active structure that supports the binding, I’m sure we will continue to see strange things in the portfolio… Tether closely monitors these on all exchanges that trade a couple USDT/USD. If they did not provide “unlimited” liquidity to buy, for sale, the binding would fall apart”.
In other words, a strange pattern of trade, which was noticed by Bloomberg, probably indicates that the Tether produces new tokens in the increase of the exchange rate and buying when it drops below to keep the ratio of asset to dollar as 1:1.
In this case, the question arises: what if Tether will release the number of tokens in excess of providing USDT dollar reserves? Some believe that this is already happening.
Charles Ponzi once he realized that his “Tether” is about to come to an end. And this moment is inevitable and cryptocurrency. All the warnings were ignored. Real fans of bitcoin would never have allowed for something like Tether to emerge from the systemic risk that it carries.
“Swept” is bitcoin many losers? Itself. But much cooler is the fact that the whole bubble was a scheme in which the Tether was used for the manipulation of quotations bitcoin. All the evidence in a study of 66 pages with calculations, data and graphs: https://t.co/MnrNWqAcmB pic.twitter.com/qu5eBqbesV
In any case, regardless of which side you’re on, you need to identify the basic principles of Economics which have been mentioned in this debate.
The idea of supply and demand, which built the Bloomberg article, was also used Kraken as a factor of stabilization of the Tether. Their ratio can also point out the weaknesses of any secure than any currency, digital or paper.
As they say, everything is relative.
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