Topic: A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says (Read 231 times)

You guys are right, if tether loses any sort of credibility, that would mean great things for bitcoin, because people who leave USDT will go to other crypto, but we are not talking about just bitcoin here, because at this day you do not have just bitcoin as an option, like if they want to go to stable anyway they could turn their USDT into btc for a short while but go towards USDC or BUSD or DAI or anything they want something like that, because if they were in stablecoin they could turn that into crypto for a while but there was a reason why they were in stablecoin and that if that reason is still there, they could still end up using stablecoin easily, and price will not change too much for anything aside from USDT.

Maybe for a short while those other stablecoins could go up in price but people will use arbitrage to make a profit from that for sure.

Even with that in mind, it would not make any sense that crypto would fall, how could it fall? I mean shouldn't the idea be that people would want to sell their tether and get crypto instead? Shouldn't that cause the price to go up? I mean there is really no logic here where tether being worthless could hurt crypto, after all people who run away from crypto should be capable of actually increasing the value of bitcoin instead, that should be the case honestly.

Of course this doesn't mean that tether will suddenly go down soon, or it doesn't mean that people will lose hope right now, I just mean to say dude said crypto could be bought cheaper because most crypto would be pegged to USDT but I feel like just the opposite is more possible. In fact it would be great for bitcoin if USDT turns out to be something bad, at least people who hold USDT would exchange it for bitcoin no matter what the bitcoin price would be.

On contrary if there was a sudden loss of faith in tether, that would mean people would sell their tether, why would anyone want to stay in something that they do not have any faith in? Which means we are going to see people running away from tether, and when they sell their tether what to do they buy with it? That's right, they would buy bitcoins with it.

This is why I think if tether lost all their customers, became a company with zero money in it, and every single USDT in the market was sold back to tether and all the money was taken back from them, we are going to see an insane and unbelievable increase in bitcoin. By comparison tesla bought 1.5 billion dollars worth of bitcoin and increased the market more than 10% higher, if we see 20+ billion USDT all switched to bitcoin we are going to see 2x easily for bitcoin all on first day.

There is no doubt it is a serious problem to the whole space, thank God Tether team came to their senses and decided to settle the case out of court, which is something I was discussion with some people the right way to go because anytime they are to appear in court the market will react, I just hope that now that the saga is over they can become more transparent about their operations and their accounting

I think he meant the most famous stablecoin out there. There's no doubt about it since the majority of Bitcoin trades are traded in USDT, it even outshines altcoin trades.

Anyway, it's not like it's the end of Bitcoin when people suddenly lose trust on USDT. By far USDT is probably the most suspicious stablecoins out there because of lack of audits and reports on their assets so other predators (other famous stablecoins) will likely try to market their coins to replace the spot of USDT.

I don't think there's going to be any big problem since people have a lot of choices to make. Either use another stablecoin, withdraw their money from exchanges, or use altcoins just like the old days. Sure there's going to be FUD happening that will affect all cryptocurrency (since almost every altcoin is using USDT for trades) but that's only temporary.

I believe after that the whole market will recover in no time as there are many stablecoins out there that willingly replace USDT position as the most used stablecoin.
It's not like the whole crypto market is entirely depend on the existence of USDT remember the day before stablecoin even a thing, and to find replacement for such thing is definitely very easy. Though that's just my guess without considering all other complicated factors that might be unknown to me.

even though it is known as the largest financial securities in the world from America, we cannot conclude what will happen to bitcoin, besides that it also participates like @elonmusk to buy bitcoin, so we can be sure that there will be an impact that will occur. if only as an observer of securities and financial firms, we cannot guarantee it with other observers who have always been vocal but have never influenced anything with the movement of bitcoin and crypto in general.

This is just rhetoric in all the securities trading and financial observations that cannot be sure if it can be properly fulfilled because he did not go directly into it or sell the bitcoin he owns, but that cannot prove either.

Exactly! I don't know why this JPMorgan is being so pessimistic with bitcoin? Bitcoin exists even without Tether. So why would it collapse if tether collapses? Maybe, he is just spreading fud for those ignorant users. But for crypto users, they are being hypocrite. Now, they can see that bitcoin will not crash as what they want. And instead, a lot of top companies are going into crypto, which they don't want to.

They are starting to create FUD so we can see the bear market again, but I don’t think Bitcoin will collapse just because of Tether, so far it is still stable and on a good position. There’s a lot of good options though that is already available in the market, we might see some correction if Tether collapse but the whole market will survive and that’s for sure because Bitcoin didn’t depend on Tether.

That would be Bitfinex.  It's astounding that either are still going based on how shambolic their business has been so far.

How are most of the stablecoins are in Tether?  Do people need to use Tether to buy stablecoins?  I know I can just use BTC or ETH to buy stablecoins without involving Tether.

Can someone tell me, mechanically, how can Tether manipulate the price of Bitcoin?

I do agree that if there are any major bad news happened to any of the bigger coins or exchanges, the whole crypto market will be affected in the short term. 

Also, how does Tether survive?  Is it centralized and managed by a small group of people? 

I have no trust in USDt and agree that it could be a threat. I've been saying it for years!

It won't destroy bitcoin because bitcoin does not depend on tether. Rather tether depends on bitcoin because without bitcoin all altcoins would take a huge hit and nobody would care about trading for usdt anymore. They'd all be running away from the market and trampling over each other. The biggest threat of USDT is if they keep making it without any backing and people keep selling large amounts of BTC for it.

USDT is backed with USD and some other things (as was explained to us a few years ago) when it was discovered that only 70% of the USDT was actually backed by the USD. In other words, if people start to lose faith in fiat (USD), then the same could happen with USDT - and if people really knew how easy it is to manipulate stablecoins they would never go in that direction to make it something completely normal and accepted.

JPM is generally very positive when it comes to BTC, but I have the impression that from time to time they also try to position themselves in such a way that if something goes wrong, they can always say that they have warned us of potential dangers. Yet those who have read the article to the end could find out one very important piece of information that still raises hope that people are slowly realizing that stablecoins are nothing but digital fiat which versus fiat can be frozen at any time even when stored in non- custodial wallet.

Clueless in your opinion there.  

Altcoins don't depend on tether, most don't even have a tether market pairing.

Dogecoin is the most highly traded markets against lower priced altcoins.
People that actually trade in altcoins know this.

Also if tether crashes, who says traders will be able to move anywhere, the places that hold the highest risk from tether are the exchanges.
The exchanges all crash, and the people holding on those exchanges lose out, but this has no effect on network function unless the coin needs to be profitable to afford to keep mining, which bitcoin is the most at risk.
* Most altcoins cost less than a $1000 to run and maintain monthly, so they can more easily survive a prolonged price collapse, bitcoin can't! *
Because it is not like you can run a multimillion dollar warehouse full of asics at a loss of a few hundred thousand just to keep bitcoin alive.
Neither will the majority if the price vs fiat crashes.
Miners pay their bills in fiat, not bitcoin.

I must agree if Tether goes down, this will be a big problem for all cryptos because almost all stablecoins are in Tether.

A sudden Tether crash will lead to executions of orders with 20%-50% in all major exchanges, which will lead to mass disruption. Some people will buy coins 20%-50% cheaper, but the consequences will be harmful.

First of all nobody with half a brain has any faith in any centralized altcoin specifically Tether that has also been very shady.
Secondly like any big altcoin that has also been used in the cryptocurrency market Tether could cause a lot of damage when it disappears. Bitcoin market is not an exception, it will be affected by the drama and the follow up FUD and bitcoin price could drop. But it will be a drop like any drop caused by any other big drama in the past. There is no "risk" to bitcoin though.
For example we saw a lot of massive exchanges be hacked and affect bitcoin market, even big shitcoin exchanges such as Binance affected bitcoin price. But only temporarily.

The bigger "risk" is to altcoins because the entire altcoin market has been relying on Tether specially during bitcoin bear trends. For example we saw during 2018 (when bitcoin was dropping) that Tether was being printed at a higher rate than 2017 to satisfy the need of the altcoin market as altcoin bag holders were trying to escape the dumping altcoins but didn't want to go to bitcoin either because bitcoin was dropping itself too (that drop was also causing the altcoin bloodshed).
So if anything, when Tether disappears all those shitcoin traders have nowhere else to go but back to bitcoin and that increases the bitcoin volume and reduces the "drama" effect on bitcoin price too.

Tether did not start manipulating the crypto markets to a noticeable degree until 2017 according to the below forensic study.
Bitcoin price was ~$400 before the manipulations started. Personal Observation. 

https://www.cnbc.com/2019/11/04/study-single-anonymous-market-manipulator-pushed-bitcoin-to-20000.html

https://www.coindesk.com/another-class-lawsuit-claims-bitfinex-tether-manipulated-bitcoin-market

People have been having this conversation for quite some time now, so I don't know why JPMorgan are only just starting to twig.  For "leaders" in the financial world, they're apparently pretty slow on the uptake. 

Having considered the issue for a longer period than they obviously have, I can't say I'm overly concerned.  If anything, people dumping Tether en-masse would likely result in wealth flooding into Bitcoin.  People should lose faith in USDT.  It's awful.  And once people understand why it's awful, Bitcoin only shines brighter in contrast.

Could you elaborate how Tether prop up the price of BTC?  And what do you mean by "price before Tether started manupulating the bitcoin price"?

Thanks to all your guys' inputs - very interesting.

Do you have supporting documentation on this?  I don't think BTC is pegged to anything though.  BTC is the father all cryptocurrencies and Tether came much later after (2015).