The "Bitcoin Conspiracy Theory" Going Viral Online: Tether is Creating the Biggest Bubble in Financial History

Original Author: Jacob King
Original Translator: zhouzhou, BlockBeats

Editor's Note: Recently, a Twitter thread about Bitcoin and Tether sparked widespread discussion in the English community, with a single tweet receiving over 800,000 views. Author Jacob King transformed into a staunch Bitcoin bear in the article, pointing out that the Bitcoin market is manipulated by "insiders" such as Tether and Bitfinex, maintaining price illusion through fake demand, wash trading, and unlimited money printing. Jacob believes that the so-called "government and institutional entry" is a fabricated narrative, actually a Ponzi scheme. Once liquidity is in crisis, the market will face a collapse.

The following is the original content (slightly revised for readability):

The entire story of Bitcoin is a carefully orchestrated illusion, planned by insiders to make you believe that various governments and institutions are "fully involved" — making you think that the prosperity of this market is being driven by real demand.

But in reality, this is the largest bubble in human history, destined to become the most serious financial scandal ever.

I urge you to ask yourself: If Bitcoin is truly decentralized, truly so powerful...

Why are those same few powers always the ones controlling the narrative, holding the wallets, influencing the law?

It's all smoke and mirrors, here's the evidence.

The so-called Bitcoin "investment" by El Salvador is a carefully crafted illusion.

There is absolutely no evidence of any purchases. The latest blockchain data shows that out of their treasury's 6,114 Bitcoins, 6,111 were not bought at all — they were directly transferred from Bitfinex and Tether.

Undoubtedly, they are behind the scenes. Oh, and Tether even drafted all of El Salvador's Bitcoin-related legislation.

This is not "national adoption" at all, but a money laundering scheme disguised as a government action, aiming to make retail investors believe "even the government is buying, you should too."

No wonder the corrupt Bukele is willing to cooperate, Tether greases all palms, treating El Salvador as a puppet.

Bukele gains media exposure, Bitfinex gains liquidity, and Tether gets a lifeline once again.

And those who didn't keep up may not know: El Salvador later quietly abandoned its Bitcoin legal tenderization plan, as the entire experiment was a complete failure. The Chivo wallet has actually gone bankrupt and shut down, with usage plummeting by 98.9% after its launch.

Not even Tether and its inner network could save it — because there was simply no real market demand.

Jack Mallers is a key figure in this circle — closely connected to the Tether-Bitfinex operational system.

His new company, Twenty One Capital, claims to be engaged in large-scale Bitcoin investment. However, on-chain data shows that as much as 14,000 bitcoins (over $2 billion) came directly from Tether's reserves.

They claim to have significant market demand, but the only recorded entity investing in them is Tether — a company proven to have lied to investors and engaged in fraudulent behavior. Very suspicious...

This is not really an investment but rather internal bookkeeping — another round of "shell company performance," just another part of this elaborate liquidity circus. Mallers' other company, Strike, also has a long-standing close relationship with Tether. 100% of its payment transactions rely on Tether.

This is not innovation, but a variation of monopoly.

Michael Saylor is also playing the same reflexive Ponzi loop game.

I'm sure Saylor is also connected to the insider circle that supports this whole situation. His company, MicroStrategy, is not really "innovating" — it is actually one of the most aggressive and leveraged stocks in the entire market. Their so-called "Bitcoin investment" is actually wool shearing Bitcoin.

Their playbook is very clear:

Financing → Buy Bitcoin → Pump price → Refinance → Repeat cycle.

This is a closed-loop scam built on "hope" and "hype."

What Saylor advocates is not some "hard currency" idea but rather the desire to sustain this game a little longer — to rake in as much profit as possible before the music stops.

Tether and Bitcoin are now caught in a cyclical endorsement loop — Tether is shoring up Bitcoin, and Bitcoin is in turn shoring up Tether. This structure is a ticking time bomb that could explode at any moment.

At the Bitcoin 2025 conference, Bitcoin maximalist and author of "The Bitcoin Standard" Saifedean Ammous finally voiced the underlying implication everyone had in mind:

"Tether is quietly accumulating Bitcoin, steadily increasing its reserves. One day, its Bitcoin reserves will surpass its USD reserves. By then, Tether will not only be able to maintain its peg but might even appreciate. Imagine: a 'stablecoin' worth over $1, backed not by US debt but by Bitcoin."

This is nearly a replay of the Mt. Gox and Lehman Brothers collapse: once liquidity dries up, this house of cards will crumble in an instant. With no real asset backing, only a stack of unstable endorsements.

Get ready — an epic collapse is already underway.

At the Bitcoin 2025 conference, Tether announced that it holds over 100,000 Bitcoins and 50 tons of gold.

It all sounds very fishy. Let's look at its modus operandi:

1. Tether creates money out of thin air, printing millions (or more) of USDT;

2. It uses this newly minted Tether to buy Bitcoin, driving up the price;

3. It then sells off excess Bitcoin, converting it to USD and gold as "reserves";

4. It then showcases these reserves to prove its "legitimacy and compliance";

5. Meanwhile, the audience of Bitcoin extremists (the faithful believers) continues to cheer, thinking everything is real.

Tether's skeptics have actually been right all these years. We pointed out years ago that Tether was quietly buying Bitcoin while they were still denying it. Now, they don't even bother to pretend anymore. Tether is the sole big buyer in the entire Bitcoin market — everything depends on its continuous printing and buying the dip.

This is the ultimate "house of cards." Once it collapses, there will be no savior.

The so-called "Institutional Bitcoin Demand" is nothing but a passing fad.

On June 2, the Bitcoin spot ETF saw a net outflow of $2.675 billion, marking the third consecutive day of significant fund withdrawals. This is not a random occurrence—this trend has been ongoing for several months, indicating a rapid institutional retreat.

Back in late 2021, Bitcoin ETF inflows reached billions of dollars during the peak of market frenzy. However, since then, institutional interest has plummeted by over 91%. The continued outflows now reflect waning market confidence, tightening regulations, increased volatility, and uncertain return prospects.

Institutions were supposed to be the "bedrock" of Bitcoin prices, yet they are now collectively fleeing. The so-called "institutional entrance" was merely hype and FOMO at the time. Smart money has quietly exited.

To make matters worse, even the relatively "crypto-friendly" SEC (U.S. Securities and Exchange Commission) is becoming cautious. They allegedly remain hesitant to approve more Bitcoin spot ETFs from institutions like Bitwise and Grayscale, citing weak anti-fraud mechanisms.

The entire Bitcoin ecosystem is actually a game of "smoke and mirrors." This industry is not supported by genuine demand but rather manipulated by a group of insiders (such as Tether and Bitfinex)—they continuously manipulate coins and liquidity, carefully crafting the illusion of "adoption frenzy" and "market hype."

They have built a powerful narrative that successfully convinces the public that "governments and institutions are heavily involved." But what's the reality? It's all an elaborate pump-and-dump scheme.

If you are discerning enough to see through this noise, you will realize how dangerous this is. Bitcoin's price is not being driven by organic growth or genuine institutional demand but is almost entirely reliant on Tether printing unlimited money and using it to buy BTC to sustain the price. Currently, over 90% of the buy-side liquidity in the market is backed by Tether. Once the U.S. government (the Trump administration is already pushing for it) enforces strict regulations on stablecoins, this "liquidity faucet" will be turned off, leading to a brutal reckoning in the Bitcoin market.

Bitcoin is not only unlikely to surpass $100K but could even plummet below $10K. The so-called "institutional demand" has long vanished, and insiders are gradually being exposed. This artificially supported illusion is doomed to collapse soon.

This whole narrative is a self-made fantasy, a house of cards waiting to collapse the moment reality's wind blows.

Do be warned: This is not a "hard currency of the future," but a financial time bomb ticking down.

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