Thread by @dke82

If I had to guess, my likelihood is 60/40 that the top of this run is in for #bitcoin. Always can be another squeeze up to the $6k area of course, but my personal opinion is that last move was caused by bots (and FOMO) blindly following what amounts to a bank run on #bitfinex

If you actually read the NY AG allegations and then drop the idea that this is just some crusade against #crypto from evil regulators but accept that they probably have something to back it up, coupled with missing audits from #tether it seems pretty obvious what happened:

#tether and #bfx are one firm. They printed $USDT without having the actual USD to back it up. Then they used these to buy $BTC and push up its price. As is to be expected, if you call the shots and know where price will go, you can profitably speculate.

So yes, it is no surprise that at some point, manufactured by trading profits or shuffling of accounts (of which the absent audit is almost prove that happened) they were able to show that they had the money.

However, the sell pressure once the bubble burst was too much to contain without using their customers funds to speculate again, so Merlin asked Oz for more ammunition at which point the money was no longer there to back up $USDT.

If that is true it means that:
(1) Bitfinex/Tether used ur money & money that did not exist to speculate. And NO, this isnt what banks do. Plus, they do not have a banking license.
(2) It went well originally but then turned sour so they had to conceive new money out of thin air

(3) Bitfinex is the most risky place to keep your money, but that has been known for more than a year
(4) Any larger amounts of money held at #bfx therefore likely had little other choice (because maybe it was procured illegally, so it cannot just flow back into regulated world)

(5) So the only option for that money is #bitcoin, which is what has driven the #bfx-#bitstamp premium to all time (closing) highs
(6) I find it unlikely that same money exits $BTC to fiat as I suspect it is „dirty“ money. So that itself should not cause $BTC to collapse

(7) #bitfinex experiencing (abating) bank run;do not expect premium to come down significantly
(8) #bfx launching IEO/#ICO to trick more investors to cover losses or announce successful so market can assume they are solvent.May reduce premium;unlikely to be true.Don‘t fall for it

(9) Without regulators moving further, I think it likely that #tether survives for the time being. However, the process has been kicked off - further actions, like the (in my view almost inevitable) cease and desist could come any day.

(10) Given $USDT is still 80%+ of $BTC trading volume, when (9) happens is when we will see what #bitcoin is actually worth. That is also when we will likely see the adverse price reaction. In absence of (9) $BTC can simply drift and be manipulated as before

My likeliest scenario right now is that the top is in, but a squeeze up can never be excluded if more money needs to leave #bfx. Over time the pump of the last few days should leave price again as newsflow calms down.

None of this is financial or legal advice. All of it is my personal opinion and I am just guessing like you are. I have no proof beyond what is easily accessible and I can be wrong. Easily.

Scenarios from my last article on medium still valid IMO. /end

PS with the push to $6k overnight, my short term short sell limit has been hit. While I am still only 60/40 that the top is in and while I am still only guessing like the rest of you, I am now also positioned for the scenario. Low leverage, low $ amount. Don‘t copy. Not advice.