Tether, the issuer behind the leading stablecoin, USDT, has made headlines by acquiring $1 billion worth of Bitcoin\u2014approximately 8,800 BTC\u2014during the third quarter of this year.\u00a0<\/p>\n
While many investors have reacted positively to this significant investment, caution has emerged from industry experts like Jacob King, CEO of SwanDesk, who warns that this move may contribute to what he believes could be the \u201clargest bubble in history.\u201d<\/p>\n
In a recent post <\/a>on social media platform X (formerly Twitter), King raised serious concerns about the Bitcoin market, claiming that 80-90% of the total buy volume is artificially inflated.\u00a0<\/p>\n He argues that Tether essentially creates money \u201cout of thin air,\u201d injecting it into Bitcoin and thereby exacerbating the speculative environment. Despite the growing trend of exchange-traded funds<\/a> (ETFs) and institutional accumulation of Bitcoin as a treasury reserve, the cryptocurrency\u2019s real value might be \u201cfar below $1,000.\u201d<\/p>\n This narrative has been ongoing for years, provoking varied responses within the community. One investor countered King\u2019s assertion by asking why major institutional players, including sovereign ETFs and Fortune 500 companies, continue to invest in Bitcoin if such a large portion of the trading volume is deemed fake.\u00a0<\/p>\n His argument suggests that either these institutions are misinformed or that the real bubble lies within traditional fiat currencies rather than cryptocurrencies like Bitcoin.<\/p>\n King refuted <\/a>this notion, alleging that the idea of significant institutional investment in Bitcoin is largely \u201ca myth.\u201d He contended that most inflows into ETFs are driven by retail investors, not large institutions.\u00a0<\/p>\n Further amplifying his skepticism, King criticized Strategy <\/a>(previously MicroStrategy), the largest publicly traded company holding over 600,000 BTC, describing it as a \u201cleveraged Bitcoin casino.\u201d\u00a0<\/p>\n He alleged that the company\u2019s co-founder, Michael Saylor, has a history of inflating numbers during the dot-com bubble, suggesting that the current situation is a repetition of \u201cpast mistakes.\u201d<\/p>\n In contrast, other experts like Quinten Francois view Tether\u2019s recent Bitcoin purchase through a more optimistic lens. Francois highlights <\/a>the US government\u2019s push for stablecoin adoption via the GENIUS Act, which mandates that stablecoin issuers be licensed, transparent, and fully backed by US Treasuries.\u00a0<\/p>\n He argues that this regulatory framework could channel trillions in offshore Eurodollars into US bonds through stablecoins, effectively continuing quantitative easing but through these private entities rather than the Federal Reserve (Fed).<\/p>\nSkepticism Vs. Optimism<\/h2>\n