Today I want to look into the future and take on the role of a seer. On a subconscious level, I have a need to share this with the reader, and only time will tell where I was wrong or where I was right! So let's dive into the world of guesses or truths in which we will find ourselves in the future (this article is intended exclusively for those who in one way or another associate themselves with cryptocurrency, please do not confuse it with CBDC) let's begin!
TETHER(USDT)
To start, briefly about TETHER(USDT)
Imagine a digital currency that remains stable despite the wild ride of the cryptocurrency market. This intriguing concept could change the way transactions and investments are made in the world of digital currencies. Enter Tether (USDT), a stablecoin that has managed to maintain a stable valuation amid the turbulence of the crypto market. But what is USDT? It is a digital token pegged to the value of a fiat currency, providing stability and ease of use in the volatile world of cryptocurrencies.
Tether (USDT) is a cryptocurrency stablecoin that maintains a 1:1 ratio to the US dollar and provides secure trading of digital assets and liquidity.
USDT plays an important role in cryptocurrency markets, reducing price volatility and allowing users to safely conduct transactions while minimizing risks.
Tether has faced significant risks and disagreements but continues to be a key part of the digital token ecosystem, offering stability compared to other stablecoins such as USDC or DAI.
TETHER(USDT) is the world's first stablecoin (cryptocurrency pegged to the value of a fiat currency), released back in 2014 by Bitcoin investor Brock Pierce, entrepreneur Reeve Collins, and software developer Craig Sellars.
It is also a cryptocurrency asset issued on the Bitcoin blockchain using Omni Layer protocols, Ethereum (ERC-20), TRON, EOS, Algorand, Solana, and OMG Network. Each USDT unit is backed by US dollars held in reserve by Tether Limited, which can be redeemed through the Tether platform. Initially, the coin was called Realcoin. However, in the subsequent rebranding, it changed not only its name but also the underlying technology. Essentially, it is the most popular stablecoin in the cryptocurrency market, which is claimed to be backed by US dollars at a 1:1 ratio. This cryptocurrency is represented on various blockchains and has shown growth in trading volumes and liquidity over the past few years.
I hope we have figured this out! Now let's break down what a stablecoin is.
What are stablecoins?
A stablecoin (from English stablecoin) is a general term for cryptocurrencies that are pegged to reserves of ordinary currencies or physical goods (gold, oil) and whose exchange rates are subject to smaller fluctuations than typical cryptocurrencies.
According to Brenn Hill Consulting, stablecoins have a clear drawback—the level of trust required to maintain the exchange rate towards a centralized exchange mechanism contradicts the decentralized nature of cryptocurrencies. In the absence of centralization, the risk of non-fulfillment by the other party is similar to the risk on a commodity exchange—where, however, in the case of non-fulfillment by one of the participants in the contract, the responsibility lies with the exchange.
When creating stablecoins based on the US dollar, an obvious solution for creating reserves is to invest the dollars obtained from cryptocurrency into US government bonds in an attempt to ensure the functioning of the system through the interest earned. According to the consulting company, this is not an ordinary cryptocurrency designed as a cryptographically secured equivalent of all ordinary currencies pegged to the US dollar (USD). Because of this, it has some advantages in use compared to other digital currencies.
Tether was designed specifically to integrate traditional money into the blockchain by converting it into a digital asset. Since the blockchain is considered the safest system for storing and transferring data today, many developers prefer to create digital assets based on it.
Pros - The first is stability. The peg of these tokens to the US dollar, one of the world's main fiat currencies, allows investors to take advantage of all the benefits of digital transactions based on blockchain without the serious volatility associated with most cryptocurrencies.
The second plus is the transparency of calculations. Tether creators regularly verify the correspondence between user accounts and the funds available in storage.
Completing the list of advantages of this stablecoin is its widespread use and the presence of a reserve fund. Services that technically could not use the US dollar for accepting payments now accept Tether, thus expanding their capabilities and user base. The existence of a reserve fund ensures the stability of the token's exchange rate. The funds stored through Tether are equivalent to the amount of USDT in circulation. Well, I think we'll end the description of this stablecoin here! (If anyone is interested, there's plenty of information about it on the internet)
Suspicion of fraud and investigations
In July 2021, the US Department of Justice began an investigation into the company's management. The agency suspects that at an early stage of Tether's development, top managers may have concealed connections between some transactions and cryptocurrency. Another US agency — the Commodity Futures Trading Commission — fined Tether $41 million in October 2021 for false information about the token's backing.
In addition to questions from authorities, Tether is also criticized by market researchers. For example, Hindenburg Research announced a reward of up to $1 million for information about the backing of the USDT stablecoin. Researchers point out that the company does not disclose data about counterparties that allegedly hold Tether's commercial papers.
**Tether issues USDT on various blockchains, including Tron and Ethereum. According to information on the company's website, Tron ranks first in the number of USDT issued on its network, with a volume of over $60 billion. For comparison, USDT issued on Ethereum amounts to nearly $54 billion. The total capitalization of the USDT token exceeds $118 billion, as of September 10.**
The transparent nature of the blockchain as a public ledger of cryptocurrency transactions allows any participant to track operations with cryptocurrency and the movement of funds between wallets. In addition, many centralized stablecoins, including USDT, have tools for freezing assets on a specific wallet directly at the blockchain level, with appropriate labeling in analysis systems, reminds crypto expert and author of the GFiS Channel, Taisiya Romanova.
In just a few weeks since the launch of T3 FCU, law enforcement has managed to freeze over $12 million. Such asset freezing is not a new practice for Tether, which has been blocking users' funds since 2017. According to statistical panels on Dune, over 1,700 addresses on the Ethereum blockchain have been frozen, totaling over $1.2 billion.
Now let's get to the role of the stablecoin, what is the connection between BITCOIN and USDT
Conversion of Bitcoin to Tether and back!
We certainly love Bitcoin, but it is well known that its price is quite unstable and can fluctuate daily by up to 10% (or even more!). Bitcoin helps people who do not have access to traditional financial services achieve financial freedom, but it is not as stable as some other cryptocurrencies, like Tether. This means that you can protect your funds from price volatility if you store them in USDT. Thus, you ensure reliable protection for your money. Conversion allows you to safeguard your funds. It takes seconds but can protect you from potential monetary losses. There are many examples, but let's take one!
Example - you bought Bitcoin for $3,000, some time passed in the cycle and it became worth $59,000. Now, in order to preserve your profit from its sale, you sell it for a stablecoin (USDT), thus preserving your profit from the sale of Bitcoin!
Many people use this and see great prospects for earning.
Now we have gradually approached the most important part, that is the essence of the article.
From 2017 to 2024: Trends of Bitcoin correction in bull markets
The peak of Bitcoin at $73,737, reached on March 14, 2024, about seven months ago. Indicators show that this is the longest period in Bitcoin's history without a 25% drop during a bull market. In contrast, during the bull markets of 2017 and 2021, the price fell significantly several times before reaching their respective historical highs.
During the bull market of 2017, Bitcoin experienced about seven significant corrections, while in the 2021 cycle there were about five downturns. Although the bull market of 2021 was different from that of 2017, the current cycle also has its unique features. While the dust settles after recent price fluctuations, the digital currency community remains on guard in search of potential entry opportunities amid current corrections. On the other hand, with a mix of panic and fear in the air, some bulls are now looking at Bitcoin's future value with cautious optimism.
At the beginning of 2024, Bitcoin received a powerful long-term growth momentum from the approval of the first eleven spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC), applications for which from leading investment firms were awaited for almost six months, comments Arthur Meinhard, head of the analytical department for global markets at IK Fontvielle.
(On the expectations of this event at the end of 2023, the price of BTC rose by 74% at its peak, but this was a speculative rise, not a fundamental one, so after the event itself, the largest cryptocurrency faced a correction, " notes Arthur Meinhard.)
After the correction, Bitcoin started to rise again. This growth already has fundamental grounds, as the emergence of new funds plays into the demand side. In just 17 days since their launch, the volume purchased from the market is comparable to what the largest institutional Bitcoin holder, MicroStrategy, accumulated over three and a half years. Currently, forecasts regarding the price of Bitcoin after the halving vary significantly. According to some analysts, the price may reach $120,000. It is important to remember that the cryptocurrency market is in a state of instability and is subject to many factors, including global economic conditions, changes in legislation, regulatory social and regulatory changes, technological innovations in global politics and economics, wars, etc.
Simply put, BTC ETF is an investment product similar to stocks that allows investors to buy and sell Bitcoin on exchanges. Interest in Bitcoin from participants in the traditional financial world is confirmed by impressive statistics on capital inflow into Bitcoin ETFs.
The beginning of the fifth bullish cycle in the crypto market
And here we come to the essence of this monologue. Right now, at the peak of anticipating future profits, I mean those who have long and persistently bought and accumulated Bitcoin at the lowest prices during these years of the bear market (not everyone has achieved this, but many are very close) considering the current price of BTC. (Let me remind you that today is 02.11.2024 and the price of BTC is $69,575 based on market cap.)
What will the crypto layman do after the market peak is reached?
That's right, selling Bitcoin and locking in your profits! But what will they lock in their profits with? Correct, in the stablecoin Tether USDT! In my opinion, the fifth bull market, considering the trajectory of Bitcoin's growth over time, has come to the moment when it is time to harvest, not for us, but for giants like BlackRock and their gang to enrich themselves even more at our expense! Once again, this is my vision, and I am not saying that it will be exactly like this or that Bitcoin has reached its end! I predict that Tether USDT will play a big role in the hands of the government, I don't know which world government, or any other, but something will happen!
EXAMPLE - Bitcoin reaches another peak, retail traders convert it into USDT, and then it may collapse. I don't know how it could happen, perhaps the court will start acting like it did with Ripple (XRP), or maybe it will be deemed invalid for one reason or another, the top will find a reason! And everyone who made a significant profit from selling Bitcoin will be robbed just like people were during the collapse of the USSR! People were just left with nothing! I don't know if it's worth writing about, but the purpose of this post is different. Many bells are already ringing that this coin is not backed by anything and its issuance is already very large due to the recent events that the US has orchestrated, there is logic in this!
Cryptocurrencies decreased in value after reports of Tether's platform being investigated by US authorities
**Cryptocurrency prices have slightly decreased after WSJ reported on the investigation against Tether**
The prices of the largest cryptocurrencies fell after the WSJ reported that US authorities are investigating Tether, the issuer of the stablecoin of the same name, for possible violations of sanctions and anti-money laundering laws. The value of Tether tokens is pegged to ordinary currencies: for example, one USDT — the most traded cryptocurrency in the world — is approximately equivalent to one dollar. Stablecoins play a crucial role as a 'gateway' to the cryptocurrency markets, as they serve as an intermediate step in buying Bitcoins and other cryptocurrencies with ordinary money, Bloomberg noted.
The price of Bitcoin, the largest cryptocurrency by market capitalization, fell by 3.3% to $65,878 at one point, although prior to that the price remained virtually unchanged throughout the day, reports Bloomberg. The price of Solana decreased by about 5.5%, while the 'meme' cryptocurrency Dogecoin fell by 5.6%, the agency reports. The price of the second largest currency by market cap, Ethereum, also dropped by more than 2%, as shown by the CoinGecko service. Meanwhile, Tether's price lost only about 0.2%, according to the data.
Shares of companies associated with the cryptocurrency market also fell following trading on October 25. The price of shares of the cryptocurrency exchange Coinbase decreased by almost 2%. Shares of Bitcoin miner Mara Holdings (formerly known as Marathon Digital) fell by 6.37%. Shares of the largest corporate Bitcoin holder MicroStrategy lost 0.66%, although before the drop, they reached the highest level since the beginning of 2000 — $245.57.
Are Tether's problems the beginning of the end?
The federal government of the United States is investigating Tether for possible violations of sanctions and anti-money laundering laws, sources from The Wall Street Journal reported. According to them, authorities are checking whether the cryptocurrency was used by third parties for financing illegal activities: drug trade, terrorism, and hacking, as well as for legalizing income obtained from such activities. The US Treasury is considering imposing sanctions on Tether because its cryptocurrency is actively used by those already under Washington's restrictions, the newspaper wrote.
Tether and its cryptocurrency have raised increasing concerns among federal regulators and law enforcement in the US, according to WSJ. Unlike other, more volatile cryptocurrencies, the value of Tether is pegged to the US dollar, making it an ideal substitute for US currency where the use of dollars has been prohibited by US regulators, the newspaper explained. All Tether tokens, including USDT, are pegged to their respective familiar (fiat) currencies at a 1:1 ratio and are backed by Tether reserves, the company claims. The price of USDT fell to about 99.81 cents after the WSJ report, Bloomberg noted.
Tether stated that it does not see any signs that it is facing a larger investigation, reports WSJ. "The assumption that Tether is somehow involved in aiding criminals or violating sanctions is outrageous," the company noted in its account to the publication. Tether added that it actively cooperates with American and international law enforcement in combating illegal activities. Tether's CEO Paolo Ardoino called the WSJ report "old noise." Now it is clear that I am not taking this from nowhere, and the noise is still there, as he calls it old)))
What is important for the investor
Stablecoins, whose value is pegged to real assets and which include Tether, play a crucial role as a 'gateway' to the cryptocurrency market, as they are an intermediate step in using fiat money to purchase tokens (for example, Bitcoin) and vice versa.
USDT is the most traded cryptocurrency in the world with a market capitalization of approximately $120 billion, Bloomberg wrote. Every day, transactions worth up to $190 billion are conducted with Tether, WSJ added. Do you understand the volumes? Regulation of stablecoins poses a threat to Tether's dominance, according to a JPMorgan report.
Not financial advice, look for alternatives to Tether (USDT), there is no smoke without fire! Take care of yourself and your savings))
And yes, let's look at this article over time and find out if it was all imagined or ... .
