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*PSA* Tether is putting these XRP exchanges at risk: Bitfinex, Bittrex, Kraken & others.

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11 minutes ago, Zielonegrabiezawszewmodzie said:

You can't.

Thanks. OK. I have a decent bit of USD on bitfinex. I pretty much have as many zerps as I want, so the majority of that money is for 1. buying bitcoin as it falls further and 2. Trading (most of which is shorting for me!).

So I have a slight problem. I guess the ultimate fear is losing all my fiat money on bitfinex. How likely do you think that is to happen in a worst case scenario? I've heard that 1broker is now allowing fiat withdrawals, but I'm not 100% sure about that.

I'm going to move the bitcoin there onto my ledger nano right now. I suppose a sensible thing to do may also be to buy some bitcoin, get it into bitstamp, then sell it straight away for USD (hoping the price doesn't fall too much in the meantime and catering for the 100 dollar difference in bitcoin price between bitfinex and everywhere else, so I'll probably have to take a hit), then keep that fiat in bitstamp waiting for my proper bitcoin purchases from a price of 5k down.

Then keep my trading stash of fiat on bitfinex and just hope for the best, knowing that it's money that may disappear if bitfinex is closed down suddenly.

Does that sound kinda sensible?

Edited by djdhrubs

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3 minutes ago, djdhrubs said:

I guess the ultimate fear is losing all my fiat money on bitfinex. ÔĽŅHow likely do you think that is to happen in a worst case scenario?

Rather low chance, I think.

Then again,¬†it's not my money¬†ūüėõ

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11 minutes ago, djdhrubs said:

Does that sound kinda sensible?

It does. When you decided to enter this thing, you decided to be long all kinds of risk, and it's probably best not to obsess over every single one of them. 

I really loved Miguel's answer to a question, at some college, when asked about future XRP price. 

"Everything's going to be alright." 

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2 minutes ago, automatic said:

@djdhrubs Kraken is USD-based and also allows for margin-shorting cryptos.

Regarding keeping your cryptos on Bitfinex, I personally would not be comfortable with that approach (given that they are right in center of this nonsense), but as @jcdenton said - it's not my money...

No my plan was to keep fiat money on bitfinex, but move cryptos off it. I then use that fiat money for trading, the majority of which seems to be shorting in my case. I live in UK.

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4 minutes ago, djdhrubs said:

No my plan was to keep fiat money on bitfinex, but move cryptos off it. I then use that fiat money for trading, the majority of which seems to be shorting in my case. I live in UK.

Yeah... take a look at Kraken anyway and see what you think.

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7 hours ago, automatic said:

I'm still trying to work out what the likely scenario may look like, but I can't get a clear picture quite yet.   Let's assume Tether is fake money, that Bitfinex is in the business of money laundering, and that many other exchanges are running fractional reserve models.  Bitfinex is sitting on large reserves of Tether and BTC.  Tether start losing its peg and Bitfinex realize that their time is running out.  What next?

It would make sense that they would move their Tether to other exchanges and then attempt to sell them on an open market using trading bots so as to prevent volume from spiking and keep the peg as long as possible.  Some Tether would thus be converted to USD.  If the peg divergence accelerates, then this option becomes no longer viable, and in turn they would have to convert Tethers into other cryptos as soon as possible.  Concurrently, traders would probably start to panic and also convert their Tethers into crypto.  This would cause a buy pressure on cryptos thus in theory causing many cryptos to moon while the Tether concurrently crashes.

However, a money laundering operation can only work if the money can be transferred into the system as well as out of the system.  Now that the money is in other cryptos, it will need to be sold back out into USD.  Assuming that Tether-to-crypto dump was sudden and other cryptos did in fact moon, chances are that many traders will concurrently be looking to cash out their profits.  This will put the pressure on the exit door for all, and that pressure will be further compounded by news of Tether (and possibly Bitfinex) collapse.  As quickly as everything moons, it begins to crash as everyone begins to look to sell.

Since the number of fiat off ramps in crypto is limited, this places a lot of pressure on exchanges with fiat off ramps.  Those exchanges engaging in fractional banking quickly deplete their cash reserves and/or are forced to place a halt on withdrawals.  This halt increases investor panic thus causing more selling.  Prices then collapse across the board and all people still in the market become involuntary long-term hodlers.

That's the scenario I'm trying to work out anyway.  Let me know what you think.

People will convert into BTC and send it to cold storage .

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18 minutes ago, djdhrubs said:

No my plan was to keep fiat money on bitfinex, but move cryptos off it. I then use that fiat money for trading, the majority of which seems to be shorting in my case. I live in UK.

 

8 minutes ago, automatic said:

Yeah... take a look at Kraken anyway and see what you think.

Second that. You have no fiat money on finex as far as I can tell :) 

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No worries...trusted institutional stablecoins will replace tether and help the stablecoin market grow with time in a trusted manner....it's just a matter of time...what bothers me is the masses are going to make BTC succeed because institutions will likely push that crap on their clients, and their clients are dumb, greedy enough to jump on the BTC bandwagon....it will just be about profit taking for them... not about investing in the underlying tech.

Why?  Because the dumb SEC gave BTC (and similar) a pass and stalled on all other cryptos, thus giving institutions the green light to push that piece of crap through the ceiling.

 

Edited by enrique11

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I have a decent amount of usdt on binance to pick up cheaper zerps if prices drop but all this tether talk has me worried. What do you guys recommend I do? Would it be better to go into some other stable coin on a US exchange? If so which one? Other option is just buy xrp now and cold storage it. Thanks

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1 hour ago, bayarea510 said:

I have a decent amount of usdt on binance to pick up cheaper zerps if prices drop but all this tether talk has me worried. What do you guys recommend I do? Would it be better to go into some other stable coin on a US exchange? If so which one? Other option is just buy xrp now and cold storage it. Thanks

Binance offers other stable coins . Or just buy xrp :) 

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