What if Bitcoin demand was mostly fictitious ?

Its certain very interesting , we have 40% of the worlds bitcoin transactions happening on Bitfinex. Bitfinex have created a new cryptocurrency called Tether, in order to trade on Bitfinex to buy Bitocoin (or a variety of other crypto currencies) you must first purchase Tether which you then use to purchase Bitcoin on Bitfinex.

Tether is an infinitely producible (lets call it a fiat crypto) that advertises itself as a crypto that mimics USD, its is also known as USDT, except even though they advertise themselves as holding a reserve USD for every Tether held , they mention in the fine print that they may in fact not do that in reality.

When you look at the trading data in Tether it looks to be 80% "wash trading", that is the buys and sells appear algorithmic-ally to be coming from the same parties (or at least aligned parties). Here we have wash trading of Tether on the Kraken exchange.Almost all of the trades, you can see the three multiples of 5.5 tethers being sold and then bought back at 16.

Although it has a significant impact on the volume and is illegal in normal markets, it seems the purpose in this case is to keep tethers pegged to the dollar. Or, as some believe, they are just trying to illegitimately manipulate their volume to give others confidence in the tethers market. As you can see in the video the volume rise is substantial.?

Bitifinix the previously mentioned major exchange is owned by the same folk as Tether, then when you look at the creation of Tether it exactly coincides with the pull backs in Bitcoin. If you want to go deeper into the details of wash trading of Bitcoin follow Bitfinix'ed articles on Medium.

Then we add to this that Bitfinex accounts cannot be converted to currency to any bank account where the bank holds a US banking license, in fact Bitfinex have decided they don't want any US customer period, so those US customer that hold crypto currencies in the Bitfinex proprietary wallets or those that hold Tether in a corresponding propriety crypto wallet are struggling to redeem to any currency. There is ample evidence that Bitfinex and Tether are a ponzi scheme that is about to collapse in a similar way to when the bitcoin exchange Mt Gox collapsed in 2014 losing 815,000 coins.

Meanwhile, Tether crypto who've grown from $1M to $813M reserves in 12 months refuse to be audited . They did announce an audit although when you look at the audit it wasn't as audit at all .

So lets recap we have a potentially fictitious crypto currency (fictitious in the sense they claim to be hold 1:1 backing of USD and the issuer can't prove they hold anything), that can be printed electronically at will ,underpinning 40% of global demand during a $1000-$15,000 explosion in price.

What could go wrong ?

Well it gets even better , Bitfinex offers margin lending to enable you buy even more of the potentially fictitious Tether crypto currency.

Additionally, there have been at least three dozen heists of cryptocurrency exchanges since 2011; many of the hacked exchanges later shut down. More than 980,000 bitcoins have been stolen, which today would be worth about $4 billion. Few have been recovered. Burned investors have been left at the mercy of exchanges as to whether they will receive any compensation. Trusting bitcoin exchanges to keep your money safe is like withdrawing your money from the local bank and burying it at you local beach, you might be lucky and nobody finds it but if someone does find its gone and there is nowhere to look and nobody to blame.

We are obviously in a fairly perilous times with respect to the crypto currency bubble.