Increase in Tether amount raises manipulation concerns
Tether has always been a controversial token. The rapid growth in the supply of Tether has raised concerns over whether it is one of the reasons for the boom in digital currencies, especially Bitcoin.
What is Tether?
Tether is valued in US dollars, according to Tether’s website. a digital currency tied to the value of. According to the company’s claim, one dollar is held in reserve for every Tether in circulation.
Supply: 10,000 percent in a year, 43 percent in November
Tether supply increased quite rapidly in 2017. Total valuation of $6.9 million in November 2016 has now grown to $645 million. This means a 100-fold increase in last year’s supply.
A significant part of the increase took place in the first 15 days of November 2017.. During that time, its total market capitalization rose by $200 million.
As each Tether has to be backed by one Dollar, questions are being raised about how Tether as a company has managed to expand its balance sheet over the past year.
Transparency page not very transparent
Tether.to has a transparency page that claims to represent the company’s balance sheet in near real time. The company’s reserves are allegedly subject to regular audits.. Following the criticism, Tether.to issued a memo from Friedman LLP, which was hired as a consultant to make limited findings on the company’s cash between September 15 and September 17.. Concerns about assets held by Tether.to have been re-raised as supply increased mainly after September 17.
Willy and Markus are back?
Trading with non-existent coins means that the price is lower than can cause rapid increase. The spike in 2013 is claimed to have been due to two bots – Willy and Markus were two separate bots that regularly bought Bitcoin and raised the price without spending any real money.. The alleged price operations of Willy and Marcus coincided with Bitcoin’s rise from $150 to $1,000, raising suspicions.. After the price surged to $1000, Mt. Bitcoin price literally crashed with Gox collapse. Later, these two accounts were personally accounted for on Mt.. Gox.
The value of last month’s increase in Tether supply ($200M) pales in comparison to Bitcoin’s trading volume ($5B), but any fear about Tether It will certainly impact the entire digital currency ecosystem.
What Tether.to needs to do is reassure the digital currency community about the soundness of their balance sheets.. This can be achieved with a full audit by a known company. They also need to be transparent about their assets – like exactly where their cash is located and who their bankers are.
What does Decentralized Applications (dApps) mean?