The Tether scandal — if it turns out to be a scandal — is great news for investors.
To start, the subpoena given to Bitfinex and Tether by US regulators was issued in early December, not today. However, it is all over the news and the markets are reacting. While it is unclear to the extent of impropriety, it is clear it is going to affect all cryptocurrencies (at least in the short run). At the same time, this is a lesson to all cryptocurrency investors. Pay attention to stories like these. The news outlets, blogs, and YouTube channels have been littered with theories about Tether and their unethical dealings. Again, it is unclear if they did something wrong, but it seems as they have. With all the negative stories, they could have easily asked for an audit and then published it.
However, this event is great news for numerous reasons:
Bad Actors Begone:
With cryptocurrencies in its early years, it is a good thing to weed out the bad actors. Projects like BitConnect and Tether have harmed the image of the cryptocurrency space; everybody is better without them. At the same time, more incidences like these might make way for more regulations. Some argue more regulations will more legitimize cryptocurrencies and protect users while others argue regulations will harm cryptocurrencies. That debate will be left for another blog.
Correction Needed
The market was bloated and a correction has been needed. Yes, it is true, the correction has been active for over a month now. However, December was truly parabolic. It was fun, exciting, but just not reality. In fact, the market is about where it would have been if December did not see such hockey stick gains.
It's a Sale!
Everything is on sale. If you are an investor who believes in the potential of blockchain technology and want to make some money — money you can afford to lose, of course — then buy some more coins. If you believe Bitcoin, Bitcoin Cash, or Dash will allow for peer-to-peer transactions without the permission of government, buy some. If you believe Ethereum, Cardano, or EOS will provide a platform allowing thousands of decentralized apps to run and improve society, buy some.
Dollar-Cost Averaging, More Bitcoins, and Patience
Among the crypto crowd are traders, short-termers, and long-termers. To the short-termers who are in for a quick buck, the Tether scandal might hurt. To the long-termers, the hodlers, it is good. One strategy for those who are in this for the long run is to dollar-cost average. Basically, every week or month at the same time, put a certain amount of money into an investment. For those who don't have millions to throw at Bitcoin, it is hard to acquire a full one (except for those in the game years ago). If the price was $20,000 a coin and going up, a $1,000 a month investment would take a long time to get a full coin. With the price of a Bitcoin at $10,000, one could acquire a Bitcoin much quicker. If Bitcoin does someday reach $40,000 a coin (or $100,000 like some predict), getting their slowly will give investors more time to accumulate. Have the end game in mind.
So, what do you think? Is this Tether scandal unfolding a good thing or bad thing for cryptocurrencies for the long run? What do you think will happen to the price of a Bitcoin in the near future? Will it even be a big deal? Do you think Tether was even a scandal?