Tether Isn’t Just Its Marketcap

Cas Piancey
4 min readMay 10, 2020


The easiest way to write off criticism of Tether is to reference marketcap. Currently, as I type this, Tether lists its USD liabilities at $8.46 billion. If we include Euro Tethers, Yuan Tethers, and Tether Gold, that puts it’s USD liabilities at somewhere in the range of $8.6 billion.

Tether’s Transparency Page

Nothing to sneeze at, but in comparison to Bitcoin?

Bitcoin’s marketcap stands at $156 billion as of writing this article

A drop in the bucket, a mere 5% of what Bitcoin is currently presenting. So how could 5% of the net worth of an asset effect a market in a broader sense than 5%?

Enter Velocity and FUD

These are two very different concepts, and one takes a little more to dissect than the other, so we’re going to start with velocity.

Velocity, in a general sense, refers to the speed something moves in a given direction. This is a solid definition in regard to economics, as well. The velocity of money refers to how quickly a unit of X (an asset, currency, commodity, derivative) exchanges hands in a given amount of time (essentially, how quickly X moves from point A to B to C to D, etc).

The velocity of the dollar has been on a downward trajectory for a considerable amount of time:

Velocity, in a sense, is a volume metric. You’re measuring the amount of dollars (etc) going through the market, and you’re counting each spending use case respectfully. The more often they’re used in a given amount of time, the higher the volume.

Enter Stablecoins and Wash Trading

It is nearly impossible to find a reliable price aggregation website that provides data subtracting all wash trading volumes in cryptocurrency. What’s wash trading?

Wash trading, is, to be frank, a way to fake liquidity for a given asset, enticing real traders to move into the market. Once the real traders bring money into this propped up market, regardless of what direction they enter (long or short), the people perpetuating the wash trading are likely to come out on top.

If you want a stricter definition:

Despite the fact that there’s certainly plenty of wash trading going on in traditional markets, big Bitcoin and Tether defenders will admit that almost all of the volume present for Tether is based on wash trades.

In a sense, this is the defense. The volume metrics are false and are not to be relied upon, because almost all of the volume metrics are just buys and sells between a single entity.

Fair enough. Except…

Notice the velocities of larger stablecoin operators range from 87% to 900%. Tether always leads the pack.

What exactly is this volume and what is it accomplishing for the cryptocurrency markets? The volume is being reported, it’s being witnessed on exchanges, even if they’re unreliable, and it’s being traded repeatedly for a reason. So, why?

We know it’s, at the very least, to entice real money in. Perhaps it’s, more often than not, to keep a coin from being delisted on numerous exchanges (need to have volume to meet certain exchange listing demands). There are probably various other reasons for all this so-called, “fake” volume. But that’s not the real question, is it?

What Happens When the Fake Volume Disappears?

No one really knows, do they? There’s numerous theories — from the classic Bitfinex’ed ‘Bitcoin couldn’t recover’ to, ‘it’d be a tiny blip on the Bitcoin map to a million.’ What do I think would happen?

I think most shitcoins would tank and ICO projects would fail without the need of government intervention. I think Bitcoin would likely lose some value — how considerable, I have no idea. I think likely several exchanges would fail without the thousands of shitcoins and wash trading, and that would breed more pain in regard to price.

I’m, in my everyday, a bit of a pessimist. And I don’t attempt to protest that I’m certain of anything. But if there’s so much “fake” volume… what’s it there for and why is it the majority of “trading volume” for coins like Tether?


If volumes witnessed on Coinmarketcap, Coingecko, and other coin aggregators were to suddenly appear significantly smaller, quickly, would the response from traders and talking heads online be calm, fair dialogue?

No. Any disruption would be met with a heavy-handed commentary from media and influencers, which would permeate a market that, like social media, never stops. Why would fake volumes disappear? How would wash trading vanish overnight? I can’t answer that because the truth is, I don’t know.

But I know the rationality of the average crypto bro, and I know how quickly rumors and bullshit spread through Reddit and Twitter. There’s no way a quick drying up of liquidity would be met with fair-minded, level-headed, finance geeks. It will be met with rage, if it is ever reckoned with at all.

Stay skeptical, friends.



Cas Piancey

Fraud. Fraud everywhere.