First I'd like to say there is no hard evidence for this theory just a bit of circumstantial evidence that I am shoehorning to fit my narrative. (Like the 2 other theories out there)
The Theory: FUD is being pushed everytime the bitfinex funding rate falls
A lot of money is made when the funding rate is high, by users lending and by bitfinex charging 15% fees. So there is a very clear financial incentive to increase that funding rate.
Below is the funding rate for the last 12 months, I am going to try and link some of the spikes with increased FUD.
April
Let's start in April 2017, Bitfinex'ed joined twitter and began to post full time about tether and that it was all a house of cards. This was paired with constant posts on many reddit subs, medium posts, steemit articles, etc.
This built for about a week or 2 until we saw a panic begin, people ended their funding (can take 2 to 60 days) and started to sell their tether into cryptos, driving those prices up on bitfinex. It also left the funding market with less liquidity which causes the rates to skyrocket.
October
There was renewed FUD using the BCH fork and bitfinex's decision to stop supporting individual US customers, it began in august but didn't seem to take hold until october nearly a month after the US announcement. People only then began to equate the US service restriction to tether with the contasant help of trolls. This caused bitfinex to issue a clarification around that time.
Wash trading
I remember them getting a lot of traction with FUD about wash trading but I can't remember when exactly, the start of December??
Now
Friedman LLP removed bitfinex from there list of customers, this was noticed about a week ago but as usual it takes time to build a bit of panic and get some traction with FUD. Expect to see funding rates begin to go up depending on how long they can keep this up.
Bonus Conspiracy
This post has been quite pro bitfinex so far, 'it is all FUD bitfinex is fine'. But what if they are in on the FUD. MAybe there reluctance to do an audit is so they can continue to undermined tether so they can keep the lending rate high. 15% of all interest is quite an incentive.
Other Theories
As mentioned at the start their are other theories that have as much proof as this one (namely none), so in the spirit of fairness here they are.
Bitfinex/tether is a scam and will eventually collapse leaving USDT and probably any funds on bitfinex worthless.
Bitfinex is a start up company that suddenly found itself worth billions and are trying their best to keep the skies on enough to continue to rack in millions a day in fees. Lack of audits, bad support itc are just growing pains.
If you pick the correct theory and trade accordingly you will likely make a lot of money, good luck.
Thanks for reading.
KevinBacon
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Interesting theories...don't know what is right, and what is wrong..but one thing is for sure, whoever control the news, controls the price of Bitcoin...and when you control the price of Bitcoin, you control the crypto market in general..Us small investors don't have a chance..only able to follow the flow.
You certainly have a point but I don't fully agree. Those that controls the media can move the price (significantly) but not control it all the time. Also who controls the media nowadays? especially in crypto. If you have a popular twitter account you have some control/impact.
Also I think it is easier for small traders to make money in this environment, just swim in the whales wake and eat their leftovers. Small traders mostly get hurt when they get greedy, they see the juicy meal and try to get ahead of the whale, and many times they get gobbled.
That may be the best metaphor I ever thought of
Of course it is easier to make money in this environment..but also to lose money..All you can do is choose your strategy to fit whatever way the market moves..
It is certainly not the small fish with an active Twitter account who makes headlines..it's the whales...and now, Maybe Wall Street who wants to make money on their Bitcoin contacts..What I'm trying to say is money controls news, FUD and whatever..
very nice post mister... thanks for sharing..