March 28, 2024

Bitcoin. Digital gold or object of manipulation.

From the low of March 2020, when the rate dropped to around 3800, it has grown more than 10 times, almost reaching42,000 (at time of writing).Where did these cosmic numbers come from, did everyone really believe in digital gold, “store of value”. Let's take a closer look at what's happening on the cryptocurrency market and why what's happening this time really looks like a pyramid.

We've been seeing headlines a lot lately.various media (not only specialized ones), which constantly report about new maximum Bitcoins: $30,000, 35,000, 36,000, etc. often forgetting to mention or simply not paying attention to exactly which dollars we are talking about. Naturally, not about Australian or New Zealand, but about USDT, the difference is only one letter, but it is decisive. This topic has already appeared, but has not caused much discussion. Now, against the background of mania, it is raised only mainly by various “conspirators”.

Let's start with what the company itself says. USDT (tether) is a token that is pegged to the dollar (electronic dollar), that’s exactly what it says on its website.

Every tether is also 1-to-1 pegged to the dollar, so 1 USD ₮ is always valued by Tether at 1 USD.

However, they do not even hide the fact that there is no 100% reservation in real dollars.

Every tether is always 100% backed by ourreserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).

Let's see further

The coin is managed by Tether Limited,registered in the British Virgin Islands, whose regulators are loyal to crypto startups. There is no address of the company's office on the project website - only an indication that it is located in Hong Kong.

On the website and in documents, Tether emphasizes thatUSDT is not money, it has no real price and the firm is not obligated to guarantee the value and security of each token. Also, the company has no obligation to return US dollars to users and it reserves the right to refuse service and compensate for losses to users who have violated the user agreement. If Tether goes bankrupt, no one will return the funds to users. (a source).

Such a superficial assessment already raises questions. As we see, even from their words it is said that there is no 100% guarantee in dollars. An independent audit was not carried out either.

This situation has long gone out of the planeusual suspicions and is the subject of litigation and scrutiny by US authorities. In April 2019, Tether’s lawyer admitted that the coin is only 74% backed by money and “equivalents.” In October, a class action lawsuit was filed in the US District Court for the Southern District of New York against Bitfinex, Tether and parent company iFinex Inc. And already in September of this year, regulators “took hold” of them again.

The company that issues USDT tokens has been in court since 2019, but it has still not provided the information required by the US authorities. (source).

The RIPPLE example shows that this time things can be much more serious.

Next, let's move on to charts

Below is the capitalization of tether

Bitcoin. Digital gold or object of manipulation.

It can be seen that in the second half of 2017 and the first half of 2019, the increase in capitalization contributed to the “final push”, but these are trifles compared to 2020.

Bitcoin. Digital gold or object of manipulation.

After the collapse, the market began graduallyrecover, as usually happens in extremely pessimistic moods. On March 31, the first batch of “doping” was introduced, approximately 1.6 billion. Total: in the period from March 2020 to January 13, 2021, capitalization increasedfrom 4.65 billion to 24.23 billion!

This managed to stop several attemptsreversal on November 25th and January 3rd, “flooding” massive forced liquidations of long positions, and the largest one occurred on January 10th and, apparently, it will no longer be possible to cope with it (we will consider this issue at the end).

Bitcoin. Digital gold or object of manipulation.

Problems can begin in two cases: 1. When investors begin to massively exit USDT into the real dollar. 2. When the regulator seriously intervenes.

Tether technical director Paolo Ardoino recently announced full support and other successes, but apparently they are not going to do an audit.

Bitcoin. Digital gold or object of manipulation.

However, the rules on the site itself (point 3) clearly state that if something happens, the company does not owe anything to anyone.

Bitcoin. Digital gold or object of manipulation.

There are other alternatives to USDT such as PAX (also a digital dollar). The company's activities are approved by the SEC, and PAX is managed under the direction of the authorities of the State of New York. PayPal works with them and there is no such uncontrolled issue.

The above facts point to serious concerns about potential price manipulation attempts and fraud.It may well turn out that 40,000 USDT inin real dollars only 29,600 (if you take 74%) and then with the condition that things are not even worse. However, this does not mean that you need to completely forget about the cryptocurrency market with its opportunities and disadvantages, because... Bitcoin is the same speculative asset as many others, only with much lower liquidity.

Some may ask:What does technical or wave analysis have to do with it if such manipulations occur. As has been said more than once before: TA helps to understand in graphs and figures the psychology of investor behavior. If the market is not ready for a phase transition, some manipulations can actually push it, in VA this can be reflected by lengthening waves. But when the subdivisions are completed, and a clear impulse has passed down, no intervention will save. Let's remember last spring, when the Fed made several attempts to flood everything with new money, but the market fell further and stopped only when the crowd sold everything or was short, which is a signal for a change in trend, just like TA indicating a reversal. That’s when the “fresh money” came in handy - the market was ready for it.

The situation is similar in the crypto market: when the “global” impulse goes down, the mood will change from buying at any price to selling at any price, and no amount of typing will help here.

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