IF USDT would collapse what do you think will happen to the BTC price? - page 6.

bryant.coleman

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Quote from: Lucius on December 13, 2020, 10:17:30 AM

bryant.coleman, 1 USDT should be backed with $1, and at one point it was publicly revealed that as much as 30% of the USDT on the market were not backed with $, but with some other things. If someone powerful (and that's only the US) wanted to go all the way and investigate the whole thing thoroughly, they'd probably find enough reason to shut down the whole thing.

At that point, anyone in possession of the USDT would actually have one big nothing, and that would really be very bad news that would definitely hit Bitcoin. To the average viewer looking at it from the side, it would sound like this: "Coins worth $20 billion printed from nothing, is Bitcoin also fake?"

Dealing with stablecoins is far more dangerous than with fiat -> Most Stablecoins Can Be Frozen, Even in Your Own Wallets

Completely agree with your post. Stablecoins such as USDT goes against the very principle of cryptocurrency. The biggest advantage with Bitcoin is that you will be able to store money on your own. This is not applicable to stablecoins, because the exchanges are storing the money and they are issuing a token to you to represent its value. And as you have pointed out, many of these exchanges reject independent audit and therefore we don't know whether these stablecoins are backed up 1 to 1 or not.

If any of the larger Stablecoins go down, it can have a very bad impact on the exchange rates and adoption of Bitcoin. It is unfair, as Bitcoin has nothing to do with these stablecoins.

MCobian

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My opinion that if USDT collapses it will certainly affect all coins, including the Bitcoin price there is a possibility of being dumped.
Because nowadays many people trade crypto on exchanges using USDT pairing, moreover, the amount of USDT volume is still the highest.
So USDT collapse will panic investors, this is what might cause Bitcoin price to dump. If this happens I am sure it will not last long,
because Bitcoin always recover quickly.

Silberman

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Quote from: RTR_CH on December 13, 2020, 06:19:11 AM

Hey Guys

New here but not in the Space.

What's always annoying me about the whole Tether discussion is the fact that everybody that talks about the topic mostly assumes that if usdt collapses (not saying that it will) bitcoin would dump harder than ever before. While I can see that a lot of volume is through tether ( I would say its the majority) the collapse would by no mean be a small event. If you look back tho to end of 2018 when the whole Crypto Capital saga took place and usdt "dumped" into the .80s the only thing that really happened was that btc immediately spiked by a good amount simply because if you price btc/usdt if one collapses the other rises. So let's just assume that the day when tether would collapse actually comes and it's not just a few days of uncertainty. What side would win. A) everybody just want's to flee usdt (into btc) or B) everybody want's to flee crypto as a whole (through btc into "real usd" / coinbase)

I think a dump will happen but mostly because people will panic, there will be some that will try to exchange their USDT for bitcoin increasing the demand but a great deal of people, weak hands obviously, will begin to sell, whales will see an opportunity and crash the price thinking on all the cheap bitcoin they will get, but then we will see a quick recovery as those investors simple move out to other stable coins or decide to hold the bitcoin they have, so while it will be a traumatic experience for the market the instability will only last a few weeks and then we will need just a few months to recover and the price will go back where it was before all of that happened.

bassbity

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not only panic, it will undoubtedly destroy the value of other cryptos. and bitcoin will be increasingly in demand in the market. it's hard for a large company like USDT to leave without a reason. must remain successful. The possibilities are always there, although I'm limited to guessing if the USDT collapses.
depending on the collapse, if it happens periodically, then obviously everyone is going to dump bitcoin immediately and wait for the low price.
in this case of course there will be a lot of speculation and different views.

batang_bitcoin

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Quote from: nemey on December 13, 2020, 07:22:50 AM

It's true that everything is uncertain in crypto. Even past events in 2018 cannot be used as the only guide. I am sure that if a stable coin like USDT collapses then crypto is in trouble so it is very possible that Bitcoin and other coins will also slowly decline.

It is likely that bitcoin would certainly go into a historical decline if that happens. If we compare the 2017 that has a continuous printing of USDT, it has bumping bitcoin's price. And that's why if something goes wrong for USDT and it collapses then we might see the same effect to bitcoin but in the same effect that's also negative. But we have no idea if that would be as quick dump as possible with a large decrease in price. With the nature of being resilient, it will recover. But I just wish that this wouldn't happen or anything the same.

Dragonfund

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The growth will be exponentially crazy one, just imagine pumping a total amount of $19 billion into other coins, mind you that bitcoin will accommodate lots of share since it has always been the first and most favorite coin in the market. Lots of order books will be bought over time with in a short span.
I could still remember how Bitcoin moves from $6k to $10k within and hour when China announced uplifting ban of bicoin and other cryptocurrency, the same scenario will likely happen again but this time, it will be continous probably till $100k Kiss

exstasie

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Quote from: DooMAD on December 13, 2020, 07:06:17 AM

It's all guesswork. I'm sure there would be some volatility, but it's hard to tell which direction it would go. It might also depend how abrupt the collapse is.

Absolutely. If speculators have ample time to dump USDT into crypto markets then arbitrage bots and technical breakouts could cause the rest of the market to spike upwards. This is essentially what happened in the spring of 2017, when Bitfinex and Tether lost banking capabilities and a very large disparity developed between their markets and the rest of the world. Bitstamp, Coinbase, and everyone else eventually followed them up.

If Bitfinex and Tether go completely dark, the FBI takes down their domains, large exchanges like Binance freeze USDT markets, etc. then things could play out very differently.

pixie85

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Quote from: masterzino on December 13, 2020, 11:40:47 AM

Tether's market cap is gigantic right now. During the previous Bitcoin crash, it was some mere $3B. Now it's close to $20B.
$20B in the private hands-on artificial blockchain.

If Tether collapse, all cryptos (not only Bitcoin) will collapse as well.
Some of the giant ones like Bitcoin and Ether will survive; others not.

Collapse meaning crash? That's fair.

Collapse meaning go to 0 and get destroyed? Of course not.

Tether is a real threat because it's fake money that can be made out of air and this fake money is being used to purchase coins that present real market value and even exchange to fiat money. You're turning something real into a promise made by a company and an exchange that backs it.

masterzino

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Tether's market cap is gigantic right now. During the previous Bitcoin crash, it was some mere $3B. Now it's close to $20B.
$20B in the private hands-on artificial blockchain.

If Tether collapse, all cryptos (not only Bitcoin) will collapse as well.
Some of the giant ones like Bitcoin and Ether will survive; others not.

bitkanu

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I just know that if USDT was the main reason why bitcoin has pumped in the past but for me there could be some reasons to happen with bitcoin

I remember when vitalik says that CBDC will have various ways to be traded with crypto and that could be an alternative solution when USDT would collapse.
It looks like so many people are feeling pessimistic after the US congress propose to implement the license for the stable coin issuer.

poodle63

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Depend on what's the main cause of USDT collapsing in this case, if that's because people withdrawing their money from USDT altogether then crypto gonna be fine and there's no impact at all. Maybe minor dump but not gonna bring doom to bitcoin. It's not like USDT is the only stable coin available in the market.

USDC is some promising stablecoin and might replace USDT in the future.

Kez1817

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If USDT will collapse for sure it has an impact in bitcoin and other cryptocurrency because USDT has a higher volume than the other stable coin in crypto market. If ever it will happen ,then for sure many those who hold USDT will be in a huge loss. Crypto market is always volatile but if this will happen then I think there is a dramatically decrease on other cryptocurrency because almost all coins has a pair of usdt.

Lucius

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bryant.coleman, 1 USDT should be backed with $1, and at one point it was publicly revealed that as much as 30% of the USDT on the market were not backed with $, but with some other things. If someone powerful (and that's only the US) wanted to go all the way and investigate the whole thing thoroughly, they'd probably find enough reason to shut down the whole thing.

At that point, anyone in possession of the USDT would actually have one big nothing, and that would really be very bad news that would definitely hit Bitcoin. To the average viewer looking at it from the side, it would sound like this: "Coins worth $20 billion printed from nothing, is Bitcoin also fake?"

Dealing with stablecoins is far more dangerous than with fiat -> Most Stablecoins Can Be Frozen, Even in Your Own Wallets

bryant.coleman

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What happens to USDT in the future has nothing to do with Bitcoin. As most of us know, USDT is a token issued by the Bitfinex exchange, and is backed up with assets denominated in US Dollar. In short, rather than a decentralized cryptocurrency, it is a digital version of fiat currency in cryptocurrency format. So ideally if it goes down, Bitcoin should not be affected. But since it is traded in various cryptocurrency exchanges, I am assuming that there will be some impact.

Coyster

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Bitcoin being the speculative market that it is and how it is to a large extent an unpredictable network, I would not be surprised if it doesn't affect the price of Bitcoin too much, when covid-19 pandemic struck the world and the world economy, bringing it to a huge plunge, quite a lot of people expected and even predicted bitcoin to suffer that same fate, but it wasn't to be, bitcoin instead had a good year and is moving to cross it's ath.

Having said that, I know USDT prolly has more connection to Bitcoin than the traditional economics, but you cannot remove the factor of uncertainty in anything concerning the network, people using USDT should rather be careful, rather than bothering on what will happen to BTC price if it (usdt) collapses, as only them (holders of usdt) could feel the impact if anything along that lines happens.

Darker45

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There'd be chaos. The collapse would wreak havoc to the market. Tether is a 20-billion market, after all. But I guess the severity of its effect to Bitcoin would highly depend on whether the collapse is abrupt or gradual and how things would unfold after that.

However, it seems we will not be completely surprised if this day would eventually come. I guess a lot of people have already been given enough heads-up about USDT.

tyz

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It is difficult to say whether Bitcoin would collapse. But it would certainly have a huge impact. A lot of traders use USDT as a currency pair with Bitcoin. A loss of confidence there will mean that a lot of money will flow out of crypto and therefore the price of Bitcoin will go down. Similar problems and rumors from Tether have already shown this in the past. Fortunately, there are now many alternatives to USDT which could counter a massive slump.

Beparanf

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If USDT will collapse, BTC and the general cryptomarket will follow. USDT already have the majority of the volume of all the stablecoin available right now and collapsing means most of the crypto user that holds USDT will be in a huge loss which means the buy power in cryptomarket will decrease dramatically.

We know that tether is a really shady company but they are not dumb to runaway with a billion dollar market that they are currently monopolizing. There profit here is consistent and huge.

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Quote from: RTR_CH on December 13, 2020, 06:19:11 AM

So let's just assume that the day when tether would collapse actually comes and it's not just a few days of uncertainty. What side would win. A) everybody just want's to flee usdt (into btc) or B) everybody want's to flee crypto as a whole (through btc into "real usd" / coinbase)

A sudden collapse would certainly cause panic in the market, tether is one of the most talked about stable coins (positively and negatively) and accounts for a large chunk of cryptocurrency trades, there would be different fractions that would result from such a situation;
• The ones who have always criticized stable coins and would see this as a reason to double down on Bitcoin.
• The speculators who even though they trust the Bitcoin network use usdt and other stable coins to trade and lock profits; They would likely also switch back into Bitcoin fully.

I'm both scenarios above, Bitcoin would benefit as there would be a spike in demand.

• There are also the users who were not so convinced about cryptocurrencies and would see a collapse in tether as a testament of how unpredictable this market is, they could exit out of the space altogether.

What direction the market would take depends on which of the above players makes up the majority. Although I would expect volatility in either direction early on.

In the long run however regardless of how the market reacts initially, Bitcoin should survive and stabilize, as it is not directly pegged on usdt or any other currency.

nemey

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It's true that everything is uncertain in crypto. Even past events in 2018 cannot be used as the only guide. I am sure that if a stable coin like USDT collapses then crypto is in trouble so it is very possible that Bitcoin and other coins will also slowly decline.

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