$500 bitcoin….and the Canary in the Coal Mine
There are only a few “black swan” type of events that can crush bitcoin. However, one of them is likely in motion even as you read this. However, there is a canary in this coal mine.
The SEC and the federal government are not known for playing around, and without a doubt they are smelling the rotten odor from Tether. The amount of investigations they run will surprise the average person. These are not the average investigations you might see on TV. They are being done by a fully funded federal agency full of high IQ college graduates and without time pressure. They have a worldwide reach and nearly unlimited resources for important investigations.
If you think they are not investigating Tether you are wrong. If you think Tether has any chance whatsoever of not being a scam your wrong. The SEC could crack open this rotten egg any time it wants. The largest bitcoin exchange in the world with its doors kicked in and bitcoin seized. All tether accounts frozen at any exchange using it. Panic would not begin to describe the market, and IMO $500 bitcoin would be a reality.
This is why the bitcoin ETF is so important. Just because Tether is rotten does not mean the SEC will move on it. A bitcoin ETF is the canary in the coal mine.
The SEC could ignore Tether for many reasons… it would be highly unpopular politically to crash a global market….a former director of the FBI is now mixed up in Tether’s web making it even more messy politically….it would also be easy to claim lack of jurisdiction. Claim is the key word here, if the SEC wants something done pretty much anywhere in the world they can make it happen.
I believe a bitcoin ETF that contains actual bitcoin and not derivatives has a good chance of being approved next year. The more people that own bitcoin the harder it will be to manipulate the market, which is the SEC’s chief complaint. A derivatives based ETF does not do anything but encourage more manipulation, and has no chance of passing IMO.
If a bitcoin based ETF does pass, then it is highly doubtful a black swan kick in the doors Tether event will happen. One side of the agency will be well aware of what the other side is doing.
This does not mean Tether will have a licence to do whatever they want if a bitcoin ETF comes about. American friendly Coinbase and Bittrex are an example. Coinbase does not use Tether, and Bittrex recently introduced a Tether alternative with the likely end goal being to eliminate Tether from the exchange. Other exchanges who want the American dollar and to not get blacklisted by the SEC will need to follow suit.
So an ETF approval will not only greatly increase bitcoins price, it also will prevent the opposite from happening. It is needed worse than people realize.