As long time Bitcoiners, we are not shocked by the ongoing confusion around the nature of the bitcoin market. The reality is that, unlike other public markets, the bitcoin market has significantly more noise. There is noise around price valuation, noise around use cases, noise around data and noise from skeptics. It is very difficult for a new person to enter into the bitcoin market and cut directly to the signal.
This confusion has been manifested once again in a misguided article circulating the web: “The Bit Short: Inside Crypto’s Doomsday Machine[1].”
It seems that the author of the now-viral Medium article has, like many others, slipped into some pretty big newbie pitfalls around bitcoin exchange data, bitcoin’s nature as black market money and, of course, fear, uncertainty and doubt (FUD) around a prominent grey market dollar solution called tether. This article will examine the author’s key arguments one by one and explain these pitfalls, demonstrating why they should not be taken seriously in anyone’s consideration of tether or its relationship to bitcoin.
The root of the tether conspiracy is a fundamental assumption that the bitcoin market is not legitimate and that there is no legitimate demand for bitcoin, only FOMO that is created as a side product of “fraudulent tether printing.” In 2016 or 2017, the tether conspiracy theory was a very powerful narrative. That’s right, these very tether fears existed before 2020… this story is old.
In 2021 in a world where we know fiat is being devalued at an enormous clip, people and institutions are flooding into anything that is not fiat and big wig investors are appearing on TV, discussing their massive allocations to bitcoin[2]. Today, the no legitimate demand story is a lot weaker. Bitcoin is the world’s
