In the financial world, especially in the emerging and unpredictable field of cryptocurrency, various interpretations and speculations emerge endlessly. Among them, "conspiracy theories" often attract a large audience due to their dramatic and provocative nature. When the market experiences severe fluctuations, and when certain narratives diverge from intuitive feelings, stories about "behind-the-scenes manipulators" and "meticulously planned scams" find fertile ground for dissemination. Recently, a discussion portraying the Bitcoin market as a "house of cards" manipulated by insiders, relying on false demand and unlimited money printing, has sparked widespread debate, directly targeting industry participants like Tether and Bitfinex.

These arguments often amplify and connect certain doubts or controversies that indeed exist in the market, constructing a narrative that seems coherent but is actually filled with logical leaps and evidence flaws. As rational observers and responsible media, it is necessary for us to pierce through these sensational appearances, deeply analyze the core points of these so-called "conspiracy theories," clarify their specific accusations, and examine them one by one based on facts and logic, rather than easily falling into preconceived judgments.

Argument 1: Tether is an "infinite printing machine," creating USDT out of thin air to manipulate Bitcoin prices.

The core accusation of the "conspiracy theory": This argument claims that the issuer of the stablecoin Tether (USDT), Tether Limited, is able to "create money out of thin air" and "print" large amounts of USDT, then use these USDT, which lack real fiat currency support, to purchase Bitcoin on a large scale. This action artificially inflates the price of Bitcoin, creating a false sense of prosperity; on the other hand, when the price of Bitcoin is driven up, the manipulators will sell some Bitcoin in exchange for real dollars or other fiat currencies, thereby achieving profits in a "empty-handed wolf" style, and using part of this real fiat currency as their so-called "reserves" to pass inspections, forming a self-reinforcing fraud loop. In short, Tether is the largest "internal trader" in the Bitcoin market, dominating the rise and fall of Bitcoin through unlimited money printing.

Rational rebuttal and factual analysis: Depicting Tether's operations simply and crudely as "unlimited money printing and pumping Bitcoin" is an overly simplistic narrative that overlooks the intrinsic complexity of the market and the actual operation mechanism and market demand of stablecoins.

First of all, the core issuance mechanism of USDT is based on market demand. Theoretically, when authorized market makers, large trading platforms, or institutional investors need USDT for trading, providing liquidity, or arbitrage, they will deposit an equivalent amount of fiat currency (mainly USD) to Tether Inc. at the official exchange rate (usually 1:1). Only after Tether Inc. receives the fiat currency will it correspondingly mint and issue an equal amount of USDT to these institutions. Conversely, when institutions need to exchange USDT back to fiat currency, Tether Inc. will destroy the corresponding USDT and return the fiat currency. Therefore, the increase in the total supply of USDT largely reflects the real demand for stablecoin liquidity in the overall cryptocurrency market, especially when the market is active or experiencing significant fluctuations, the demand for stablecoins as trading mediums and hedging tools will significantly increase.

Secondly, the reserve issues of Tether have indeed been a historical focal point of controversy, but the situation is gradually improving. Historically, Tether has faced scrutiny from regulatory agencies (such as the investigation by the New York Attorney General's Office, NYAG) and widespread market skepticism regarding the transparency of its reserve composition and the adequacy of its audits. These doubts primarily focus on whether it consistently holds high-quality reserve assets equivalent to the total amount of USDT issued. Although such cases have generally ended in settlements (for example, Tether and Bitfinex paid fines to NYAG without admitting wrongdoing), they have not completely dispelled all concerns. However, in recent years, Tether has begun to regularly publish reserve detail reports that have been attested by third-party accounting firms (although not the top four). While these reports are not equivalent to comprehensive financial audits, they do provide a snapshot of the composition of its reserve assets (such as cash, cash equivalents, commercial paper, corporate bonds, precious metals, digital assets, etc.). Critics can still question the liquidity and risk levels of its reserve assets, but this is different from the nature of the "eyewash" allegations.

Furthermore, attributing the long-term trend of Bitcoin prices entirely to Tether's "manipulation" is untenable. Bitcoin's price is driven by a variety of complex factors, including the global macroeconomic environment (such as inflation expectations, interest rate policies), technological developments and innovations (like the Lightning Network, Taproot upgrade), changes in the structure of market participants (such as the entry of institutional investors), regulatory policy guidance, market sentiment, and geopolitical factors. Although in the early market, which lacked effective regulation, or during specific time windows, large-scale capital injections (whether from USDT or other sources) could theoretically impact short-term prices, proving that the entire decade-long bull and bear cycle of Bitcoin is entirely a "scam" dominated by Tether would require a direct and comprehensive chain of evidence far beyond merely observing the correlation between USDT issuance and Bitcoin price fluctuations during certain periods. Many academic studies and market analyses have also failed to reach definitive conclusions about Tether's systemic and long-term manipulation of Bitcoin prices.

Finally, if Tether is indeed a pure "money printing machine" without real demand support, its stablecoin USDT should have collapsed long ago due to its inability to maintain the peg with the US dollar. Although USDT has experienced brief periods of decoupling in its history, it has overall managed to remain relatively stable, which indirectly indicates that there is a wide practical demand for its existence in the market.

Argument 2: "National-level adoption" is a carefully orchestrated eyewash, with key figures deeply involved in "insider trading".

The core accusation of the "conspiracy theory": This argument claims that certain countries (such as El Salvador) declaring Bitcoin as legal tender, or certain well-known entrepreneurs (like Jack Mallers, Michael Saylor) heavily investing in Bitcoin, is not a genuine national strategy or business decision, but rather a "performance" carefully orchestrated and funded by "insiders" such as Tether and Bitfinex. The aim is to create the illusion that "even countries/large institutions are buying Bitcoin," enticing retail investors (FOMO emotions) to step in, thereby creating conditions for these insiders to unload their holdings or further drive up the price. Specific accusations include:

• The Bitcoin in El Salvador was not purchased with real money, but was directly transferred from Bitfinex and Tether.
• Tether deeply participated in the drafting of El Salvador's Bitcoin bill;
• Jack Mallers' company funds come directly from Tether reserves;
• Michael Saylor's MicroStrategy is engaging in a "reflective eyewash" by continuously using high leverage financing to buy coins.

Rational rebuttal and factual analysis: Reducing national behavior or corporate strategy simply to a part of a "conspiracy theory" often overlooks the complex background of the event itself and the conventional ways of market operation.

About El Salvador's Bitcoin Experiment:

• The standard operation for large Bitcoin transactions: Regarding the claim that their treasury Bitcoin comes directly from transfers from Bitfinex and Tether, "conspiracy theorists" view it as evidence of "non-genuine purchases" or "insider delivery." However, in the cryptocurrency market, especially when it involves large purchases by sovereign nations or major institutions, it is standard operating procedure to buy directly through over-the-counter (OTC) transactions rather than the public market. This is done to avoid a drastic impact on the market price within the exchange due to large buy orders, thus allowing for the acquisition of the required amount of Bitcoin at a more stable price. After the transaction is completed, it is entirely normal for Bitcoin to be transferred directly from the seller's (which could be the OTC department of a large exchange, mining pools, or other entities holding large amounts of Bitcoin, such as the trading department/affiliates of Bitfinex or Tether) wallet to the buyer (such as the treasury wallet designated by the Salvadoran government) as part of the settlement process. Therefore, asserting the nature of the transaction solely based on the on-chain transfer path may overlook the conventional market practices for large institutions acquiring digital assets.
• Considerations of Transparency and Actual Benefits: Of course, this does not mean that El Salvador's Bitcoin experiment is flawless. The transparency of its decision-making process, the specific costs of acquiring Bitcoin, the significant decline in the usage rate of the Chivo wallet after its initial promotion, and the actual impact of Bitcoin's legal tender status on the national economy are all topics worth ongoing attention and in-depth discussion. These issues need to be objectively assessed based on facts, rather than simply labeling them as an "eyewash."
• The possibility of Tether's involvement in legislation: Whether Tether has deeply participated in the drafting of El Salvador's Bitcoin bill is indeed a question that needs to be taken seriously. If true, it is necessary to assess the degree and manner of its involvement, as well as whether it has gained any improper benefits or negatively impacted the fairness of the bill. However, this alone does not directly constitute sufficient evidence that the entire "national-level adoption" is a false eyewash, and should be examined more from the perspectives of regulation, lobbying, and potential conflicts of interest.

About Jack Mallers and Michael Saylor:

• Business Cooperation and Sources of Funds: The allegation that Jack Mallers' Strike company or its affiliated companies' Bitcoin investments largely stem from Tether reserves requires specific evidence to confirm the direct flow and nature of the funds. It is not uncommon for companies within the crypto industry to engage in investments, collaborations, or fund borrowing. The key lies in whether these transactions are compliant, transparent, and whether there are undisclosed relationships that could harm the interests of other investors.
• MicroStrategy's high-leverage strategy: Michael Saylor's MicroStrategy has adopted a strategy of heavily borrowing to purchase and hold Bitcoin long-term as a core company strategy, which is a public, high-risk, high-leverage financial strategy. Saylor himself has never shied away from expressing his extreme optimism about Bitcoin and the company's aggressive approach. This strategy resembles a public declaration of a bet on the future of Bitcoin, with risks that the market is already aware of, allowing investors to determine for themselves whether to agree with and participate in its stock trading. Referring to it as a "reflexive Ponzi cycle" may be a misunderstanding. The core characteristic of a "Ponzi scheme" is that it pays returns to early investors using the funds of later investors, while MicroStrategy's model utilizes financing to purchase real existing assets (Bitcoin), with its success directly dependent on the future price performance of Bitcoin and the company's debt management capabilities, which is fundamentally different from the definition of a Ponzi scheme. Of course, the extreme riskiness of this strategy cannot be ignored.

Argument three: "Institutional demand" has faded after temporary speculation, and the outflow of ETF funds is a warning signal.

The core accusation of the "conspiracy theory": This argument suggests that the narrative of "institutional investors massively entering Bitcoin" is merely a temporary hype and a product of FOMO sentiment, and that real and sustained institutional demand does not exist or has significantly weakened. The net outflow of funds from Bitcoin spot ETFs after initial inflows, or the fact that some institutions' interest in Bitcoin is not as strong as expected, are interpreted as evidence that "institutions are collectively fleeing" and "smart money has quietly exited," indicating that Bitcoin's price lacks long-term support.

Rational rebuttal and factual analysis: Interpreting the short-term fluctuations of institutional behavior as a fundamental reversal of long-term trends often lacks a comprehensive understanding of the dynamics of financial markets.

• Normal fluctuations of ETF fund flows: The inflow and outflow of funds in exchange-traded funds (ETFs) inherently exhibit volatility. Short-term net outflows do not necessarily represent a complete reversal of long-term trends or a fundamental decline in institutional interest. Various factors influence ETF fund flows, including cyclical changes in investor sentiment, fluctuations in macroeconomic conditions (such as interest rate adjustments and inflation data), short-term profit-taking behavior, phase adjustments in asset allocation strategies, tax factors, and changes in the attractiveness of other alternative investments. To assess institutional attitudes towards Bitcoin and long-term allocation trends, it is necessary to observe data over a longer time dimension, combined with the institution's own public reports, changes in positions, market depth research, and the fundamental development of the industry, rather than hastily concluding based solely on short-term fund flow data.
• The gradual and diverse adoption by institutions: The adoption of emerging assets such as Bitcoin by institutional investors is typically a gradual and cautious process rather than an overnight success. Different types of institutions (such as pension funds, endowment funds, family offices, hedge funds, publicly traded companies, etc.) have varying risk preferences, investment cycles, regulatory constraints, and decision-making processes. The approval of Bitcoin spot ETFs indeed provides some institutions with a more convenient and compliant investment channel, but this is just one way for institutions to participate in the Bitcoin market. Other methods include directly purchasing and custodying Bitcoin, investing in Bitcoin mining company stocks, participating in Bitcoin-related financial derivatives trading, and so on. Therefore, judging the overall institutional demand's "retreat" solely based on the short-term performance of ETFs may be overly simplistic.
• Prudent regulation does not equate to industry denial: Regulatory bodies (such as the U.S. SEC) maintain a cautious stance on cryptocurrency-related products (such as more types of ETF applications), emphasizing investor protection and prevention of market manipulation, which is a normal expression of their regulatory duties. This also indirectly reflects that as the cryptocurrency market matures and becomes more standardized, there is still a need for continuous efforts in transparency, compliance, risk control, and market infrastructure development. Equating regulatory caution directly with a denial of the entire industry or the long-term value of Bitcoin, or interpreting it as part of some "conspiracy," is clearly an overinterpretation and misjudgment.

Point Four: Tether and Bitcoin have formed a "death spiral"; once imbalanced, the entire system will collapse.

Core accusation of the "conspiracy theory": This is a dramatic doomsday rhetoric, believing that there has formed an unstable, interdependent "vicious circle" or "death spiral" between Tether and Bitcoin. Specifically, Tether supports its own "value" (or creates the illusion of adequate reserves) by continuously purchasing Bitcoin, while the price of Bitcoin, in turn, relies on the continuous liquidity provided by Tether (i.e., "printing money" buying pressure). Once a link in this fragile cycle breaks—such as Tether facing a massive run leading it to be unable to meet redemptions, or a catastrophic collapse in Bitcoin's price leading to a severe depletion of Tether's Bitcoin reserves—the entire system would collapse instantly like a house of cards, triggering an epic financial disaster. Saifedean Ammous's remarks about Tether's Bitcoin reserves potentially exceeding dollar reserves are often cited to support the instability and potential risks of this structure.

Rational Refutation and Fact Analysis: Although there exists a certain possibility of risk transmission between any highly correlated financial assets or entities, directly portraying the relationship between Tether and Bitcoin as a fragile "death spiral" may exaggerate its inherent vulnerability and misinterpret the core logic that supports the value of both parties.

The core value support of Tether: Tether (USDT), as a stablecoin, has its core value proposition in maintaining a stable peg to fiat currencies like the US dollar (usually 1 USDT ≈ 1 USD). Its value support mainly comes from the reserves that it claims to hold, which correspond to the total amount of USDT issued. According to the reserve reports periodically released by Tether, these assets currently mainly include cash and cash equivalents (such as short-term treasury bills, money market funds, etc.), corporate bonds, secured loans, and other investments including Bitcoin. Bitcoin indeed has a place in Tether's reserves, but it is not the entirety or the absolute majority of its reserves. The stability of USDT mainly depends on the liquidity, safety, and adequacy of its overall reserve assets, as well as the market's confidence in its ability to fulfill redemption commitments.

• The Diverse Value Drivers of Bitcoin: The value of Bitcoin does not solely depend on the liquidity provided by Tether. As mentioned earlier, the price and value of Bitcoin are influenced by a combination of factors including its technical characteristics (such as decentralization, scarcity, security), network effects, market supply and demand, macroeconomic factors, regulatory environment, as well as investor sentiment and adoption levels. While Tether, as the main stablecoin provider in the market, plays an important role in the activity and depth of the Bitcoin trading market with the USDT liquidity it provides, this does not equate to Bitcoin's intrinsic value being entirely reliant on Tether.
• Complexity of Risk Transmission: If Tether faces a serious trust crisis or reserve issues, it could indeed impact the entire crypto market (including Bitcoin), leading to liquidity tightening and risk-averse sentiment. Conversely, if the price of Bitcoin experiences extreme and sustained declines, it could also pressure Tether's balance sheet, which holds Bitcoin as part of its reserves. However, whether this risk transmission will inevitably evolve into an uncontrollable "death spiral" depends on various factors, including the scale of the shock, the reactions of other market participants, the intervention capacity of regulatory agencies, and the resilience of both systems. Interpreting certain forward-looking or speculative statements (such as future projections about Tether's Bitcoin reserve ratio) as established facts or harbingers of an imminent systemic collapse may lack an accurate understanding of the current reality and dynamic equilibrium.
• The focus should be on transparency and risk management: A more rational perspective is to continuously pay attention to the transparency of Tether's reserve composition, the quality and liquidity of its reserve assets, the independence and credibility of the audit reports, as well as the effectiveness of its own risk management framework and contingency plans. These are the key aspects for assessing its stability and potential systemic risks.

Why do conspiracy theories easily breed and spread?

The world of Bitcoin and the underlying cryptocurrency, due to its disruptive technology, idealistic concepts, relatively lagging regulation during its early development, and the mixed quality of market participants, naturally provides fertile ground for various extreme narratives and speculations. The following points may explain why such "conspiracy theories" are particularly prevalent:

• Information asymmetry and insufficient transparency in certain areas: Although blockchain technology is characterized by its on-chain data openness and transparency, many key centralized operating entities (such as certain exchanges, stablecoin issuers, project foundations, etc.) often have internal operations, complete financial statuses, decision-making mechanisms, and even actual controllers that remain insufficiently transparent to the general public, and may even be deliberately obfuscated. This information gap provides ample space for various speculations, doubts, and even malicious conjectures.
• The warning effect of real historical cases of fraud and failure: from the early Mt. Gox theft to the recent bankruptcies of Celsius and Voyager, and the shocking collapse of the FTX exchange, the crypto industry has indeed experienced multiple significant loss events due to fraud, mismanagement, insider control, or hacking. These real negative cases have severely undermined some investors' trust in the industry, making it easier for people to accept explanations pointing to "conspiracy" or "eyewash" when faced with uncertainty or market fluctuations.
• The drastic fluctuations in price and the psychological tendency to seek simple explanations: Cryptocurrencies like Bitcoin are known for their extreme price volatility. When the market experiences surges and crashes, many people, especially investors who have suffered losses, are often eager to find a simple, direct reason to explain it all. "The market is manipulated by a few whales/insiders" is often easier to understand, accept, and spread than admitting "this is a natural market fluctuation under the complex interplay of multiple factors, compounded by high-risk speculative sentiment." This is a common cognitive bias and psychological defense mechanism.
• The deliberate construction and dissemination of narratives driven by interests: In any financial market, there may be some participants who actively create, amplify, and disseminate specific narratives for their own benefit (such as profiting from shorting the market, undermining competitors, promoting their own projects or viewpoints, attracting traffic and attention, etc.), including sensationalist "conspiracy theories" that exaggerate risks or even distort facts. The anonymity and rapid dissemination characteristics of social media further exacerbate the spread of such information.
• The cognitive threshold of new technologies and the universality of emotional interpretation: For the general public who are not fully familiar with blockchain technology, cryptographic principles, and the complex models of cryptoeconomics, there is indeed a high cognitive threshold to deeply understand the intrinsic value logic of Bitcoin, the mining mechanism, the consensus algorithm, and the operation of the entire ecosystem. In this case, simplified, labeled, emotional, or even demonized interpretations often spread and gain recognition more easily than rational, objective, and complex analyses.

Conclusion: Upholding rationality, evidence, and critical thinking amidst the fog.

The world of Bitcoin is an arena where cutting-edge technological innovation, disruptive financial experiments, and complex human nature games intertwine. It showcases both the enormous potential and appeal of decentralization and peer-to-peer value transfer, while also exposing various irregularities, lack of transparency, and high risks that emerging markets inevitably encounter in their early stages of development. The so-called "conspiracy theories" are often products of selective extraction, one-sided interpretation, and subjective speculation about these bizarre and complex realities. They may sharply point out certain real issues or potential risk points that exist in the industry, but the explanatory frameworks and final conclusions they provide often lack solid evidence support, rigorous logical deduction, and comprehensive factual consideration.

We do not have to regard all doubts and criticisms as formidable beasts or malicious attacks, because constructive criticism, reasonable skepticism, and the ongoing pursuit of transparency and accountability are necessary external pressures and internal drivers that push any industry (especially emerging industries) towards maturity, regulation, and healthy development. The ongoing focus on Tether's reserve composition and calls for independent audits, vigilant analyses of large on-chain movements and their underlying causes, and strict scrutiny and full disclosure of related-party transactions and potential conflicts of interest are all manifestations of a market moving towards maturity and responsibility.

However, when faced with grand narratives that claim to reveal "global manipulation," "huge eyewash," or "apocalyptic prophecies," it is particularly important to maintain a clear mind, independent thought, and steadfast critical thinking. We need to carefully discern the sources and reliability of information, distinguish between objective statements of fact and subjective expressions of opinion, understand that correlation does not equal causation, and be wary of arguments that appeal to emotion rather than reason.

The future of Bitcoin cannot be easily dominated or completely controlled by one or two so-called "conspiracies" or a few accused "insiders." It is more like a large-scale, ongoing, multi-party global socio-economic experiment. Its ultimate direction and historical positioning will be shaped by the continuous breakthroughs and iterations of the technology itself, the gradual clarity and coordination of the global regulatory framework, the maturity of market participants' understanding and rational behavior, as well as the degree of acceptance and interaction patterns of the broader socio-economic environment.

In this new digital frontier filled with unknowns, where opportunities and challenges coexist, only by maintaining a lifelong learning attitude, cultivating independent thinking ability, and developing a habit of making judgments based on evidence can one avoid being blinded by momentary fog and misled by sensational narratives, thus gaining a clearer insight into its essential characteristics and development trends. For the entire cryptocurrency industry, actively embracing transparency, continuously strengthening self-discipline, courageously accepting supervision, and honestly responding to reasonable concerns and doubts from the market is the fundamental way to effectively compress the breeding and dissemination space of "eyewash" and to gain long-term trust and broad recognition from society.

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