I have great contacts both in the US government and Industry and I know how to ask the right questions to get the right answers. I feel I have the tether - Bitfinex situation figured out. My opinions are based on what I am hearing behind the scenes as well as simple deductive reasoning.
On Feb 6, the U.S. Senate held an open meeting on crypto and didn't discuss tether or Bitfinex by name but did mention the need for more transparency and regulation to protect consumers. Anyone who trades crypto couldn't agree more and welcomes more government oversight to prevent "bad actors" from disrupting this disruptive technology in a bad way. Reading between the lines, I have to deduce that the U.S. government is not going to stop crypto but is going to be the driving force to set in place the safeguards that will attract "old money" which is very conservative in nature (spends more time figuring out how NOT to lose what they have rather than trying to get more) and when that happens, Crypto will soar to new heights. And you know, it's just as well. I like John McAfee. I want to be spared having to watch him, well, you know! (lol)
But what about the "Tether Bomb?" The so-called "Tether Bomb" is the premise that Tether will at some poine be exposed as a fraud , in the future and bring down the entire market. Some argue that their marekt cap of 2.2B is too small to bring down the market, but I disagree. If the US gov were to shut down Tether and expose them as fraudsters that FUD would drive Bitcoin down below $4000 in quick order. However, I don't believe given yesterdays testimony that doing that would be in the USA's best interest, and I will present a case to prove my point.
Most of us know that Bitfinex, working in an unregulated arena, probably printed Tether and bought Bitcoin to artificially pump up the price of Bitcoin because let's face it, they had the means, the motive, and the ability and they probably justified it by rationalizing that they were helping the crypto community make money so why not? The fact the auditor quit speaks volumes to quantify this speculation, well, that and Bitfinex'd work we all know all too well. Why then wouldn't the US government step in and shut them down? The Patriot Act and the fact they claim to hold 2.2 billion US dollars gives the USA jurisdiction in the matter. So then why not shut them down and bring down Crypto at the same time?
- Quid pro quo. Something for something. Bitfinex has something that the US government wants and the US government has something Bitfinex wants (to be allowed to stay in business and let off with nothing but fines - no prison time - if and when their indiscretions are uncovered) What does the US government want? Information on their clients, especially US citizens who make large profits and maybe didn't pay taxes, individuals or businesses the US knows might be involved in money laundering or the drug trade, individuals the US gov suspects of having ties to terrorism, known drug dealers, etc. Bitfinex owns the type of sensitive and vital (to the USA) information that would be invaluable to the US government law and tax enforcement agencies! The US government doesn't need money! They can print a few trillion bucks anytime! And prisoners? They already have plenty of those too. Therefore, I can deduce that the two sides will work out a deal that is beneficial to both sides. This will in effect defuse the Tether bomb and allow Bitfinex to stay in business, with a new partner, the US gov, on the down low. 2) The US government needs the blockchain and crypto to continue to create wealth in order to continue fueling the US economy. The USA hardly makes anything. We are a consumer nation. We need to continue creating wealth in order to offset the future losses in wealth caused by automation, robotics, and self-driving vehicles in the coming years. 3) Had the US government wanted to kill crypto, they could have by now, but they haven't. Today, they could have dealt Crypto a blow that frankly a large percentage of the market was probably anticipating. (based on the strong rebound once that didn't materialize) You have to ask yourself, why didn't they? The answer is obvious. They want to help crypto grow, not kill it, and regulation will do just that. They know the harm that the "Tether bomb" could do to the market so they will simply ask Bitfinex to shut down Tether and transition into US dollars and allow a transparent, heavily regulated new coin take their place, at least that's what I see happening in the future. 4) Deep State. Crypto gives the CIA and other "deep state" actors the means to conduct business in a way that in the past was not possible. No more airplanes full of cash, Crypto gives the people who really run the world a tool that is invaluable for them to accomplish their activities under the cover of secrecy. 5) Bankers run the world. At this current time, if Crypto collapses, it could cause the "credit bubble" to burst and bring the entire economy down with it. They can't burn down the Crypto house because it's right next door and would also cause their house to burn down! Because Intl Bankers run the world, they will do all they can to prevent Crypto from going belly-up.
The saying in their world is that one keeps their friends close, and their enemies closer! The Tether situation has given the deep state, in my opinion, the means to get a seat at the table so to speak via leverage and "quid pro quo" as I mentioned above. Moving forward, I'm sure they'll take full advantage of that situation. And don't despair, (unless you're a bad actor), the ability to prevent the bad guys from using Crypto for nefarious means had to come to pass otherwise the powers that be would have no choice but to risk shutting down Crypto (common sense) All they'd have to do to shut down the exchanges is prevent transfers in or out via banks and viola! No more crypto trading. My theories are based on the "big picture" that takes everything into account.
So what about the market today, Feb 6th? The Crypto market is currently grossly over-sold because of the unfounded worries that will not amount to anything after all is said and done. The first shoe dropped today. The US gov did not deal Crypto a death blow as many anticipated. Because "the street" always knows, expect Crypto to rally from the current $6500 level back to the $11,000 level by the end of February (or sooner) with clear sailing and few headwinds moving forward. Not only will regulation be our friend, but the Tether-Bitfinex situation will end up being a nothing burger
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