Tether is backed by Bitcoin converted to U$, not by actual US Dollars

Tether is backed by Bitcoin converted to U$, not by actual US Dollars

A lot of the controversy surrounding the Tether cryptocurrency seems to focus on whether it is fully backed by US Dollar funds or not. Several relevant questions have been posed in this respect, such as why investors would keep U$ 2.5 billion (as of May 2018) in cash deposited as reserves for Tether, with little or no return, when there are much better and safer investments available? A $2.5 billion fund manager would be a guest of honor at any bank in New York or London and they’d surely be offered top notch exclusive, investment opportunities. Why, then, keep all this cash locked up somewhere just to back a cryptocurrency? Our theory is that this simply isn’t the case.

We believe that Tether is backed by Bitcoin value converted to U$ by the current exchange rate, not by actual US Dollars, and in this article we’ll present evidence to back up this hypothesis.

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