As readers of this blog probably know, I have been very critical of Bitfinex and their release of Tethers. For those not aware how Tethers work or what they are, you can read an article here where I try to be as objective as possible in the face of what is obviously a scam. For those who just want a quick overview, Tethers are basically one dollar bills that Bitfinex creates out of thin air, and then they give them to themselves. They then use those fake dollars to wash trade the price up or buy real BTC, which they then sell for REAL MONEY, and then leave the fake Tethers on the market for other people to end up holding.

However, over the last few days the evidence has reached a point to where it can no longer be ignored, and that evidence points to the fact that a huge amount of the value in BTC was created using fake money or Tethers to pump the price, and its real value could be $5K or less.

As most people know, BTC rose from about $6K to nearly $20K in record breaking time. During this time the release of Tethers also accelerated at an almost identical rate all the way up to today with $400 million worth being printed in just the past 4 days. And it is this recent printing of Tethers which I am going to focus on because I believe it is the best evidence pointing to what they are truly used for, and how they are becoming less effective, which in turn could very well cause the price of BTC value to fall back to pre-Tether levels.

Over the past week we have seen a large correction across the whole crypto market, with virtually all coins seeing double digit losses until a recent bounce in the last 24 hours. However, when we look at BTC and the printing of Tethers during that time, we see that every support level and small rally in BTC coincided with a $100 million release of Tethers. So we have 4 days of BTC trying to fall, at first below $12K before being rescued by $100 million in Tethers, then a day later BTC wants to fall below $11K, and another $100 million in Tethers props it back up. Then BTC starts testing the $10K level, and what do you know, another $100 million in Tethers.

Now, I’m not breaking any news here, as many people watching the market have seen this same thing and have made remarks about it. But what I find very troubling is how ineffective these huge dumps of Tethers are becoming at raising the price of BTC. The last release couldn’t even keep BTC in the green for the day. Based on this, unless there is some sudden inflow of new money into the BTC markets, I don’t think Tethers can keep the price up for much longer, and a large market correction seems to be inevitable at this point.

If all of the above is true and the events of the past week are any evidence, Bitfinex would need to keep printing Tethers to tune of about $2 billion a month just to keep the price of BTC stable or slowly rising. Obviously this is untenable.







Based on this, I want to share my current strategy. While I am still doing short trades on a day to day basis, I am no longer using any fiat to increase my positions. Until the Tether situation clears itself out, the market is too precarious to be buying BTC at these prices.

As mentioned above, that is just my own personal strategy and you have to formulate your own based on your risk profile. However, for me at least, until new information comes out or new market indicators start revealing themselves, I am not adding any new fiat to increase my positions in crypto and am only trading a portion of what I already own at the moment. But even this strategy involves a fair amount of risk.

The Tether situation seems to be accelerating towards its inevitable conclusion. It may take a week or it may take several months, but the end is coming. So trade smart, and don’t get left holding the bags when this whole thing blows up, because I promise you the people behind Tethers are trying to do exactly that.