Tether, Untethered | Hodler's Digest

After 50 years, Big Bird is finally retiring. A graceful, dignified exit for a much beloved figure. One bird that may never retire nor act dignified is the albatross around the crypto market's neck. Tether. Well, this week Tether became untethered. But the question is what? Will it rise from the ashes like a phoenix? Or just get mad and call everyone a horse face? Also this week, Binance in Uganda Bitcoin goes off grid and Mike Novogratz says no to the rally this year. Ladies and gentlemen, welcome to this week's hodler's Digest. If CoinMarketCap was a murder mystery, a crypto whodunit if you will, Tether would be the prime suspect. Nobody knows the location, the weapon or the method yet they are sure of the murderer. It was the Stablecoin. But is this so called stablecoin really guilty of everything it is accused of? Or is it the most contral crypto, actually the most misunderstood market manipulation? Rumors aside, what makes Tether so controversial is the suspicion that its billions of token issuances are not actually backed by dollar reserves as they claim rumors supported by Tether's sudden break with their auditor earlier. And although an unofficial audit conducted later attempted to assuage the public of Tether's honesty, it did little to assuage its critics, one of whom is so fiery that he's actually been sued by Bitfinex in exchange connected with Tether for his brutal tether burns on Twitter. Now this week, in yet another of a series of bad news for the stablecoin, Tether appeared to become untethered and what we call the great unpegging. On Monday, it dropped to as low as 95 cents, prompting speculations of a bank run. Elsewhere on Twitter, people had their fun at Tether's expense, perhaps most notably Binance CEO cz. There were even a few contrarians out there that saw the Great Unpegging as a good thing. And finally, the Winklevibe with a thought provoking take on the whole debacle. We spoke to Tony Baes to give us his take on Tether Untethered.

There's the biggest positive from this is a reminder to people that you are dealing with a risky unregulated space and you really need to know what you're doing and you can rely on something like Tether to exist a year from now. You have to be very diligent in this ecosystem because something like this can happen. And it's a good reminder to people not to get complacent and not to assume that everything is fine. You're always supposed to understand that holding tether comes with gigantic risks. I honestly think that tether should never trade more than 95 cents on the dollar, maybe even 90 cents on the dollar. I think holding tether is very risky and a reminder like this every three to six months is very healthy for the market because it reminds people how unstable these stable coins are. A lot of people misunderstood the tether panic into bitcoin for genuine demand for bitcoin and reversal of the bear market. I disagree with that view. I think this is just a temporary migration of capital from because people were not interested in holding bitcoin because of the bear market, but the asset they were sitting in became more risky than bitcoin. I think that once this settles down people will go back to the position that they had before. I don't see this news reversing the bear market. I still think that the road the rest of this year is going to be a little bit harder, but eventually we will bottom out and prices will reverse.

If you are not a fan of the Stablecoin or Bitfinex, you might want to check out this Medium page. It's a blog dedicated entirely to uncovering alleged fraud committed by Tether and Bitfinex. Check it out purely for the simple reason that Bitfinex tried to sue it out of existence. Next up in this news roundup. Investment firm Fidelity Fidelity launched Fidelity Digital Assets this week, a pretty important development in the crypto world, even if it's not the jazziest news item of the week. Burying through the jargon, the press release notes that Fidelity Digital Assets will offer enterprise quality, custody and trade execution services for digital assets. The CEO of this new venture believes part of their mission is making bitcoin more accessible to investors. However, Fidelity Digital Assets is only available to institutional investors for now, aiming to provide them with heads up more jargon a secure, compliant and institutional grade omnibus storage solution for bitcoin, ether and other digital assets. Fidelity is hoping that there are pretty substantial Wall street credentials and over $7.2 trillion in client assets will encourage big institutions to finally hop on over to the crypto space. And Fidelity Digital Assets head Tom Jessup has promised to leverage all of the resources of a big organization in order to do so. According to research cited By Fidelity, about 70% of institutional finance executives believe crypto will eventually play a role in the financial sector, but many remain still sitting on the sidelines. Jesup and Fidelity hope to change that. Back in June, Binance founder CZ told Cointelegraph in an exclusive interview about plans to set up shop in Uganda. And this week CZ's wish came true and the largest international exchange launched a Fiat crypto exchange in Africa. If you are a Ugandan interested in crypto, you can now deposit and withdraw Ugandan shillings with Binance Uganda. Currently it is only possible to trade Bitcoin and Ethereum for Fiat. But expect more cryptos to be added in the future. Earlier this year the bank of Uganda issued a warning to its clients about risks surrounding crypto. However, the government is looking into blockchain, in spite of its pretty close relationship to the evils of crypto, as a way to tackle inefficiencies in the public sector. In a medium post, Binance talked about how this into Uganda was an educational venture as much as a business1. Their CFO believes the exchange in Uganda will bring more innovations to the region.

Uganda itself is actually a very, I would say typical or quite representative of sort of the trend that we're seeing in Africa. You know, about 60, 70 million people, predominantly demographics, quite young, very technology centered, savvy information is actually quite transparent. Actually we're firm believers in that sort of like through blockchain technology and to sort of cryptocurrency, we can actually help to drive sustainable development in Africa. The value add to the average Ugandan is basically, you know, we are delivering the freedom of money and the freedom of investment to them. So we are hiring in Africa, we're hiring, we're looking for investment partners to join our labs team. We're looking for or hiring in Uganda for operational people there. So I think we'll want to get that message out.

While Bitcoin won't. Nouriel is doing a hard fork by increasing his block size after a Senate hearing in which he called crypto both the mother and father of all scams. It's safe to say that economist Nouriel Roubini is off most Hodler's Christmas card list.

Crypto is the mother or father of.

All scams and and yet, for a man so open to debate, he seems to have blocked an awful lot of people on Twitter. So much so that the hashtag blockedbynuriel has become a badge of honor amongst the great and the good of the crypto Twitterverse. To be fair, being open to debate is one thing, but having to fend off mean tweets by the truckload is something else. Some of those featured on the hashtag blockedbynariel list are quite high profile. Roger Ver, for example, and Eric Voorhees was positively ecstatic about it. Roubini hasn't ducked all of his critics. He has fired back at some, although fortunately for us, sometimes misfiring. Like this exchange with Ari Paul, in which the Economist mischaracterized an old interview that Ari Paul had given about a $50k price prediction. Paul accused Roubini of not even watching the video he left linked to in his tweet, Professor Abini, please do your homework next time. Tim Draper, Tom Lee and Mike Novogratz are so famous for their predictions, they could star as the three witches in an Off Broadway production of Macbeth. But unlike those three witches, they tend to differ wildly in their respective prophecies. Michael Novogratz, one of the three seers, was more cautious in his predictions this week. I don't see us meaning bitcoin breaking $10,000 by the end of the year. But don't worry, this bull isn't becoming a bear all of a sudden. He still thinks that 2019 has the possibility to see big institutions getting into crypto, and he's putting his money where his mouth is too. Galaxy Investment Partners will become one of the first clients of Fidelity's new Digital Asset Service, which aims to bring crypto accessibility to institutional investors. Tom Lee, on the other hand, remains bullish as ever, sticking to his prediction of bitcoin to hit 25k by the end of the year. Everyone entering into the crypto space is essentially entering into the Wild west. But not everyone actually goes off grid and into the wild. Earlier this year we reported on the developer Daniel Jones, who claimed to have successfully completed a solar powered off grid crypto transaction using just shortwave radio and blockchain. Last weekend another developer achieved an equally if not more badass task by sending Bitcoin 12.6km away without a cell phone network or an Internet connection. Impossible, you say? Well, we spoke to the guy behind this Bear Grylls level crypto trading.

I'm trying to demonstrate that it can work and just how powerful it is. But look where I see the real myself, where I see the real value at the moment is either in censorship situations where censorship resistance is an important kind of feature. So you know, whether that's in a war zone or maybe you're in a prison or something like that where you know you're not able to get access to a cellular network for whatever reason. Something like Gotena is an easy deploy solution to be able to get from where you are to some Internet. Another one is a disaster zone where or perhaps a remote location where their infrastructure has been destroyed or doesn't exist.

Here is some further reading and watching to see you out the rest of your Sunday. Not satisfied with trying to take down crypto, Roubini puts Blockchain in his crosshairs. And in case you didn't already know, Roger Ver really, really, really doesn't like government. And I mean really. And as always, like subscribe and Hodl Cointelegraph like subscribe and Hodl.