Woo highlights the fact that “Tether is administered by Bitcoiners.”
“Tether will become the largest bnos buyer in the US Treasury,” says Woo.
Willy Woo, a professional analyst and trader, got into the debate on the centralization of the Stablcoins, particularly USDT, issued by the Tether company.
He did it by expressing that The most valuable stable in the market “strengthens Bitcoin and Libertad”.
Before entering fully with Woo’s thesis, it is convenient to review that USDT and the rest of the stablocoins are centralized, regulated and issued by a company. In the case of the firm that Paolo Ardoino drives, he has been in the eye of the storm for freezing or blocking USDT.
As cryptootics has reported, this faculty has already been exercised several times, as in cases of frozen funds after hacking to flashbots in April 2023 and the record blockade of 225 million USDT in November of the same year.
Precisely, these types of actions reinforce criticism about the control exercised by Stablecoins stations. In this regard, Bruce Fenton, Bitcoin activist and CEO of Chainstone Labs, express: “I don’t like stable currencies because I don’t like Fíat money. In addition, they will be used to increase state control over people’s money.”
In contrast, Woo maintains A favorable posture towards Tether Because “it is the largest stablecoin and is administered by people related to BTC.” In addition, he stressed: “Because the banks stopped working with the exchanges in the first days, USDT became the predominant counterpart. The BTC/USDT par is much larger than BTC/USD.”
The fact that the BTC/USDT is the largest reflects the importance of USDT for the digital asset ecosystem. This is because most of the purchase and sale of Bitcoin in centralized exchanges are made with the stable currency of Tether, and not in US dollars.
He also points out: “USDT’s growth is linked to BTC market capitalization, so Tether has incentives to protect Bitcoin. Given this growth journey driven by BTC, Tether will eventually become the largest bond buyer buyer in the United States Treasury. And with that a great power will come to defend against government attacks.”
Here it is necessary to emphasize that Woo argues that the growth of BTC is directly linked to the USDT market value. As mentioned above, most transactions and operations are made with USDT. Said in simpler terms, if the value of BTC increases, the demand for the stable currency also increases.
At the moment, USDT market capitalization exceeds 163,000 million dollars.
On the other hand, although Woo does not mention it in its publication, its thesis part of some data that are important and that help to understand the relationship between Tether and BTC. It is that in addition to issuing USDT, the firm invests in Bitcoin, mining and infrastructure linked to the Bitcoin network.
As cryptootics has reported, Tether has supported network infrastructure through several actions such as Investments in Bitcoin mining companies, accumulation of reservations and the integration of USDT into the Lightning Network.
In line with this position, Ardoino has repeatedly stated that “only BTC is completely exempt from censorship, it is unstoppable.” And this makes it more interesting because it may sound to a contradiction: a centralized company that promotes an ecosystem that has as its flag the decentralization and elimination of intermediaries.
But, the reality is that its growth and business model ends up playing in favor of Bitcoin.
And what is Tether’s business model? The United States Treasury Bonds. To understand how it works, it is enough to imagine a mechanism that is activated every time someone changes money for USDT. The firm takes those funds and places them in short -term treasure bonds.
The interests generated by these financial instruments are not distributed to users, but are the main source of income of the company. That circuit is constantly repeated, and This is what has allowed Tether to accumulate billions of earnings. In this way, they also finance the fiscal deficit of the United States government.
At this point, it is worth noting that Arthur Hayes, founder of Exchange Bitmex, states that when an investor turns his money into BTC or cryptocurrencies, that capital does not return to the traditional financial system, but remains within the ecosystem.
This phenomenon becomes even more relevant in a context where the dollar shows signs of erosion due to the sustained increase in US debt. That loss of confidence in money Fíat favors BTC, which is ceasing to be seen as a risk asset to become a reserve assetboth for companies and for many investors.
Thus, Tether meets a key role in facilitating Bitcoin access and sustaining its growth, even being a centralized company.
