Tether Report: What Research Says On USDT Cryptocurrency?
Tether Report is an informational website that seeks to quantify the effects of Tether. Find out how it works today in our review.
What is Tether Report?
TetherReport.com, also known as The Tether Report, is a website dedicated to exploring the link between Tethers and cryptocurrency price movements.
The website is run by an anonymous analyst. The analyst officially refers to himself using a string of numbers and letters.
That analyst apparently created TetherReport.com on behalf of 1000x Group. The website isn’t being updated with the latest news from the Tether situation. Instead, it provides a good overview of the Tether controversy as of January 2018.
What’s the Deal With Tethers?
Tethers, for those out of the loop, are controversial digital tokens that are purportedly backed by real fiat currency reserves. Today, Tethers like the US Dollar Tether (USDT) have a total market cap over $2 billion USD, which means that Tether, the private company behind the USDT, claims to have a bank account with $2 billion USD in cash.
In reality, Tether doesn’t appear to have adequate cash reserves to back its 1:1 promise. The company has refused to perform audits. The company’s accounting firm stopped doing business with Tether. Meanwhile, exchanges that rely heavily on USDT – like Bitfinex – also refuse to do audits.
Tether is advertised as a “stablecoin” on the Omni network. The goal of Tether, like any stablecoin, is to maintain a stable value of 1 USDT = 1 USD. To do that, the company claims to maintain cash reserves 1:1 with the USD Tether and the real USD. The main benefit of a stablecoin like the USD Tether is that users can convert crypto values into stable USD values. Exchanges now use the USDT as a convenient tradeable asset for traders. Traders can “cash out” their crypto into fiat, if they choose to do so, using USDT. They can do this because USDT are backed 1:1 with fiat USD.
Bitfinex, conveniently enough, is run by the same people that run Tether.
It’s all very shady. This story has been unraveling over the past few months.
One thing that people have noticed, however, is that the price of bitcoin has corresponded with the issuance of Tethers. When new Tethers are issued, the price of bitcoin rises.
If you follow this story to its logical conclusion, then you get to the point: the price of bitcoin is propped up by a digital token called USDT. That token claims to be a “stablecoin” with 1:1 reserves with the real fiat USD, but it seems unlikely those cash reserves are real. TetherReport.com wants to explore this connection further.
What Will You Learn on TetherReport.com?
TetherReport.com goes into great detail about the connection between USD Tethers and bitcoin price movements. The report boils down to four core points:
- It’s the author’s opinion that it’s highly unlikely that Tether is growing “through any organic business process”; instead, it seems likely that Tether is printing more USDT in response to market conditions
- Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet
- Bitfinex withdrawal and deposit statistics are unusual and would give rise to further scrutiny in a typical accounting environment
- If there is questionable activity, then the author believes that the price of bitcoin can be expected to drop by 30 to 80%
Ultimately, the report explains what I just explained above: many people believe that USDT are not backed by real USD reserves. Instead, USDT are “printed” in response to market conditions. In many cases when the price of bitcoin sinks, more Tethers will be printed, thereby propping up the price. When this scam is uncovered, the author of TetherReport.com believes that the price of bitcoin will drop 30 to 80%.
Other Points from Tether Report
TetherReport.com provides a great overview of the USDT problem and Bitfinex. Some of the other points mentioned on the site include:
- Tethers are available in multiple world currencies, but they’re only largely available with USD. There are about 2.15 million USD Tethers in existence, for example, and 14 million EUR Tethers. Most analysis – including most of TetherReport.com’s analysis – focuses on the USDT.
- In April 2017, Tether revealed that its banking partnerships in Taiwan had been severed, leading to a general suspension of deposits and withdrawals for retail customers.
- Tether scheduled an audit in September 2017. That audit was never completed. The accounting firm that was scheduled to complete that audit later backed out.
- Before its accounting firm backed out, Tether produced an internal document in late September showing total USD balances of around $440 million. This was a tenfold increase over the amount claimed earlier in the year. However, it was also more than enough to back the price of USDT 1:1 at the time.
- In late January 2018, it was revealed that the US Commodity Futures Trading Commission (CFTC) had issued subpoenas to Bitfinex and Tether on December 4, 2017.
Who’s Behind TetherReport.com?
TetherReport.com is run by an author named a long string of numbers and letters. Here’s how the author refers to himself or herself:
The author has chosen to use a pseudonym in order to avoid backlash. All reports on TetherReport.com are signed by a public hash of the name above.
“Sometimes people express views and opinions that are not popular. A pseudonymous hash signature enables an author to share such views and opinions without facing personal backlash.”
Tether Report Conclusion
Tether Report concludes its report by claiming that the entire Tether and Bitfinex situation is shady. The author claims the best way to fix this problem is for Tether to request an audit by an organization of the highest reputation – like one of the Big Four auditing firms. That audit needs to be completed transparently. It also needs to show that Tether has the exact amount of money in its cash reserves that it claims to have.
Visit TetherReport.com to get a good overview of everything you need to know about the Tether situation. However, the website appears to be a static report that isn’t updated with the latest information – so you may want to depend on other sources for the latest new about Tether, Bitfinex, and the price of bitcoin.