I'll Contend: There's Absolutely Nothing Shady, Corrupt or Criminal About Tether

[Kyraishi]

IMO stablecoins are one of the best options to purchase crypto via fiat.

Stablecoins retain value well. Its feasible to hold them long term until a good buy in opportunity arises. A trader purchasing $1 million dollars in tether today can rest assured it will be worth $1 million dollars 5 or 10 years from now. This makes stablecoins like tether a better intermediary option than altcoins which normally appreciate or depreciate in value over time.

Stablecoins do not suffer from disadvantages of bitcoin ATMs or services like localbitcoins. ATMs can carry 20% price markups. Localbitcoins can carry similar precedents and introduce possibility of scams. The lack of percentage price mark up make stablecoins a more attractive option.

Stablecoins are god's gift to crypto-currencies. It saves me the hassle from setting up ads on localbitcoins and then waste 1 or 2 days to sell off my BTC, instead I'm able to dump my wallet on Binance and come out with the same value of coins and save a lot of time. Also can avoid issues like taxation and hide your money in stablecoins if you'd like.

Used tether to trade BTC during the 20k bull run, had an amazing time and have no complaints - but to be fair I have no idea what the issue is with Tether and it being a scam.

There was a month in 2018 where tether reported $800 million dollars in tokens redeemed. This could indicate the tether and stablecoin markets are an avenue of crypto purchase for whales and large institutional investors.

If we are just talking stats, this doesn't sound that far-fetched... A lot of huge whales nowadays.

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[Ucy]

I agree with BitHodler, without transparency Tether is actually in the opinion of many a very suspicious project. If they first say that every Tether is backed with $1, then that this is not true entirely, but that it is backed by some other assets for which they do not want to reveal what it is. So if I have $100 at least I know I have them in my pocket, but with 100 Tether on some exchange, I only have promise that those tokens worth $100.

What if at some point the authorities prove that Tether is mostly printed with no real coverage in dollars? While I do not question the usefulness of a project like this, there are still too many possibilities for manipulation that justifiably cast a shadow over the whole project.

I guess they are worried the funds will be siezed.
Governments need to be alittle accommodating to things like this otherwise companies like tether will begin to move to alternatives.
I honestly wish most stablecoins have their reserve in fiat currencies for the sake of those currencies.  The relationship between cryptocoins and fiats should be mutual, in my opinion. That's probably what the stablecoins companies like tether want, unfortunately the hardness of governments is making similar companies consider the alternatives.

[exstasie]

There is no IOU obligation once USDT tokens are redeemed for fiat.

Naturally because at that point no counterparty relationship exists. Anyone who holds USDT, however, is exposed to considerable counterparty risk.

Imagine that a consumer deposits $100,000 in a bank. Its very common for banks to take $50,000 or more of that deposit and invest in it high risk schemes, which will fail. Leaving banks unable to pay those who deposited money in it. If tether is 74% backed, its far more liquid, stable and safe than the banking industry on average. The US dollar is far less than 74% backed in gold and I never see anyone complain about it.

The way I see it, they are chipping away at their reserve ratio. If the ratio gets low enough, they could fail in a bank run. That 26% loss came from a single law enforcement seizure. They are one or two seizures away from total inability to honor their obligations.

I'm not comparing them to conventional banks. Maybe they are better than some. It's a fundamentally precarious situation though. There are other stablecoins I'd feel much safer holding (though USDT has vastly superior liquidity which is an obvious consideration for many people).

Is correlation between tether volume and bitcoin demand, surprising?

Of course not. People wiring money to Tether is the same thing as people wiring money to any Bitcoin exchange. It's being used to buy cryptocurrency.

I know this.  

You know this.  

Experts and professionals appear not to know this, however, as they continue to claim there is something shady, suspicious or criminal about it:

Bitcoin Gains Correlate With Tether Issuance, Researcher Says
https://www.bloomberg.com/news/articles/2019-10-03/bitcoin-gains-correlate-with-tether-issuance-researcher-says

Yeah that old narrative has become tiresome for sure. At least there has been some pushback against it: Tether’s Impact on Bitcoin Price Not ‘Statistically Significant,’ Study Finds

[jostorres]

From your statement, why are you making tether look like it is a different technology entirely by making a separation between tether and stable coin, when tether is also a stable coin. Everyone is all entitled to their own opinion and have the right to love whatever they want to love, but I am not a fan of tether and I don't think that tether is on my mind right now.

You may have defended them to the best of your knowledge, but that does not stop the fact that bitfiniex is a corrupt company and they are still manipulating their tether coin, if you have $1 million dollars in tether now, you may not get up to that back in future because I have seen tether fluctuate down ward. I still trust usdc more than tether if I have to even get myself engaged in anything called stable coin.

[shield132]

The reason why Tether and stablecoins have bad reputation is most likely because how some people say bitcoin is the only best cryptocurrency, others are just trash. People repeat this words blindly and that's all. To be fair I was never interested with Tether but that's my conclusion from posts made there.
On another hand, why is Tether good option for purchasing crypto via fiat? You mean that you buy Tether via fiat and then buy bitcoin and this process is done for better anonimity?
Can't be stablecoins looked this way: Coins for better privacy than other standard payment methods that share privacy of cryptos but with fixed price? To make it clear, bitcoin with fixed price?

[o_e_l_e_o]

To make it clear, bitcoin with fixed price?

But it's not even remotely similar to bitcoin. It is completely centralized and completely under control of one agency, iFinex. They can print more at will and distribute it as they see fit. They could refuse to exchange it for real USD, and there is nothing you could do about it. It isn't worth its price because a significant portion of is either backed up by illiquid assets or not backed up at all. It's not trustless and it's not decentralized. It takes all the worst parts of fiat and more.

It's not like bitcoin with a fixed price at all, but rather like fiat but even worse.

[darkangel11]

The reason why Tether and stablecoins have bad reputation is most likely because how some people say bitcoin is the only best cryptocurrency, others are just trash. People repeat this words blindly and that's all. To be fair I was never interested with Tether but that's my conclusion from posts made there.

What did I just read 

Tether worked for their bad reputation and it has nothing to do with bitcoin and shitcoins! Stablecoins were very rarely referred to as shitcoins. Shitcoins are coins with no use and no purpose. Coins that rely on big words and partnerships and coins that hire people like McAfee to hype the community so devs can take profit and leave.
Tether lied! They were repeating everywhere how they are backed 1:1 and later backed ( ) out of it. You could see how they were printing money during pumps and there was no proof that it was to fill real orders.

The unquestionable acceptance of USDt on exchanges gave them the ability to buy your coins for a promise. They promised to give you back the value in USDt if you ever need it but if they don't are you going to go looking for them around the world or start a class action and wait for another 10 years to get your money back?

[ecnalubma]

No doubt its one of the best medium to buy cryptocurrencies, why should we focus on Tether anyway where today we can have other stablecoins aside from it. If the issues sorrounding it makes us uncomfortable then maybe we should refrain from using it and look for alternative until their audits are clear and reliable.

[huu78]

Perhaps just as the broker of Fiat substitute transactions in the cryptocurrency makes losses can be minimized at any time the price can drop drastically.
Usually, their pair is BTC/USD and it is not possible due to different currencies where one fiat and one is a cryptocurrency. USDT as the stable coin that follows the USD can be the intermediary.
Not only large investors who buy but many people to replace as a means of moving their assets using the stable coin.

[pixie85]

I guess Tether might work for people who cannot exit to fiat for some reason like taxes or lack of bank account that accepts USD but want something stable but I don't believe in USDT and I wouldn't hold my coins there even if I had to.

Tether is too shady for my taste and the lies they were telling and lack of transparency destroyed its reputation in my eyes. Tether makes me think of a small private bank somewhere in Nigeria where people speak broken English and nobody knows anything but everybody is smiling and nodding. Would you trust them with your money?

[Wexlike]

I guess Tether might work for people who cannot exit to fiat for some reason like taxes or lack of bank account that accepts USD but want something stable but I don't believe in USDT and I wouldn't hold my coins there even if I had to.

Tether is too shady for my taste and the lies they were telling and lack of transparency destroyed its reputation in my eyes. Tether makes me think of a small private bank somewhere in Nigeria where people speak broken English and nobody knows anything but everybody is smiling and nodding. Would you trust them with your money?

The fact of the matter is when you have unlimited funny money you can obviously swing a market one way or another pretty violently, especially an illiquid one with no regulation. Was the last run partialy powered by blatant tether manipulation? No, of course not. But if you don’t think it had a huge hand in it at least, then you need to think again. None of this might be going on right now if it were not for willy bot and tether.

These things brought attention and people to the space for the mad gains. Slowly we are maturing and legitimate entities are showing up to expose and replace the shady players like tether, but the truth is we may not have gotten here wo them, or it may have taken much, much longer. Not too long ago bitcoin was used to trade magic cards and buy mushrooms or an illegally harvested kidney(lol) and by a few computer nerds. The gains were the major catalyst for growth and the gains were largely fueled by indisputable manipulation.