It’s only a matter of time before Bitcoin collapses

Mark Slapinski


The collapse of Bitcoin is inevitable. Journalists and researchers have been raising the alarm for some time. However, very few people seem to be listening.

The high price of Bitcoin is driven by the stablecoin Tether. Researchers have noted that whenever the price of Bitcoin falls, a large amount of Tether is printed and used to buy it back up, causing the price to rise.

The high price of Bitcoin is not completely based on market demand, rather, market manipulation by Tether. The problem with Tether, is that it doesn’t back its reserves with cash equivalents. The company has the power to print coins out of thin air.

This means that if there ever was a bank run on Tether, customers wouldn’t able to exchange Tether for cash, or anything of value.

Since Tether acts as a half-way point between US dollars and Bitcoin, the collapse of Tether would equal a collapse of Bitcoin. This could lead to a worldwide financial crisis.

Authorities have already started to crack down on Tether. It is moving slowly, but it is only matter of time before Tether executives get hit with heavy financial penalties, and even jail time.

In 2021, the New York Attorney General announced that Tether and Bitfinex were banned from continuing their illegal activities in New York. As a penalty, Bitfinex and Tether were required to pay $18.5 million to the state.

“[Tether] represented that each of its stablecoins were backed one-to-one by U.S. dollars in reserve. However, an investigation by the Office of the Attorney General (OAG) found that iFinex — the operator of Bitfinex — and Tether made false statements about the backing of the “tether” stablecoin, and about the movement of hundreds of millions of dollars between the two companies to cover up the truth about massive losses by Bitfinex.”

Attorney General James Ends

The US Department of Justice (DOJ) is investigating Tether for bank fraud, stemming from its early years in operation. Investigators are probing whether the company misled banks by hiding the fact that transactions were linked to cryptocurrency. Banks often avoid cryptocurrency due to its use by criminals and money launderers.

Additionally, several US politicians are moving to further restrict stablecoins. Rep. Josh Gottheimer (D-N.J.) is looking to pass a bill that would require stablecoin issuers to ensure their coins are fully backed by reserves.

Whether it’s through regulation, or through law enforcement action, Tether’s days are numbered. And when it falls, it will bring Bitcoin down with it.

WATCH Jordan Belfort: Tether Is a Scam

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