6th December 2023 > > USDT & Ordis.

tl;dr

Questions remain about the collateral held in support of USDT. BTC is heading for a philosophically driven hard fork in 2024.

Market Snap

Market Wrap

Many breaches of $44k to the upside overnight suggests that this current rally continues to have some legs. A pullback, or at least a period of consolidation, would be healthy – markets are not meant to go up in a straight line.

Curious Cryptos’ Commentary – USDT (Tether)

The CCC has long been sceptical about the quantity and quality of collateral backing the USDT in circulation. The lack of clarity, the dubious loans to Chinese counterparties collateralised with cryptos, the lies – sorry the inadvertent mistakes – in some early reporting, and other issues, have only been partially mitigated by increasing disclosure, and “attestations” by independent third-party auditors. The contrast with USDC (USD Circle) is stark.

It is in everyone’s interests that USDT does not go the same way as some other stablecoins that proved to be anything but.

This investigation, if accurate, shows that the risk of a collapse of USDT has not gone away:

https://www.dirtybubblemedia.com/p/examining-tethers-secret-loan-portfolio?publication_id=660998&post_id=139452027&isFreemail=true&r=1u34w0

The final point helps to illuminate the lack of clarity that characterises the approach taken by senior management at Tether:

“Checking the footnote for “Bitcoins”, we find:

The “Bitcoins” category comprises Bitcoins held on-chain in wallets controlled by the Group.

The language “controlled by the Group” is interesting because Tether by definition controls any addresses holding Bitcoin collateral for their secured loans. We know from Mr. Mashinsky that Tether over-collateralises their secured loans.

Is it possible that Tether is including these “extra” Bitcoin in their reserves?”

Curious Cryptos’ Commentary – Inscriptions, Ordinals, & BRC-20

If you thought the whole inscription thingy was a passing fad, then you haven’t been paying attention. ORDI has rallied from $7 to $64 in the last month, fuelled by the rise in BTC, but far outperforming its host:

There is still a raging debate between the purists who believe that using inscriptions to add, say, a bespoke level of Doom to an individual Satoshi is an aberration, and those of a more practical nature who believe that technology will always develop and grow. The greater the number of use cases, the greater the adoption.

But the argument is about to get fierce.

Luke Dashjr is a Bitcoin Core developer who has made a contentious claim that inscriptions are “exploiting a vulnerability in Bitcoin Core to spam the blockchain”. Further, he claims that this vulnerability has been addressed and will be fixed in the v27 release slated for 2024. The effect? Dashjr says this will “kill” Ordinals, though the price action of ORDI since the announcement suggests otherwise.

Those of you who are longer in the crypto tooth will recall all too well the plethora of hard forks during 2017. The fleet of foot made off with some decent extra returns by cashing out at every available opportunity though it is fair to note that some hard forks – like BCH (Bitcoin Cash) – are still active today.

v27 of Bitcoin Core raises the distinct possibility of two new competing BTC blockchains, confusing the landscape once more.