Topic: USD Tether Failure (Read 111 times)

Hi Everyone,

I'd like to hear people's views on what they think the market will do if USD Tether turn out to be a complete fraud.

My view is that BTC or ETH would pump on exchanges which have USTD only (and no USD fiat) as traders would want to sell out of those exchanges. The cross rate of BTC/USDT would shoot upwards, and those holding USDT would have to swap it out for major cryptos are terrible prices. Other crypto currency holders could just wait to see what happens though most likely withdraw their cryptos in an effort to avoid any issues from the exchange. On the other hand, for exchanges that do accept USD fiat, they would experience a price differential for the major cryptos compared to the exchanges with only USDT because you don't have people on the exchange suddenly trying to find a safe haven crypto. That would then lead to a momentary arbitration across exchanges (which the bots would no doubt pick up very quickly) until the increased prices of the major cryptos are leveled out across the globe.

What's everyone else think? I have read other posts whereby some claim that the immediate lack of liquidity will lead to an overall decrease of market cap across the crypto asset class.

I'm also very curious as to what people views are regarding how:
 - the bots will respond. I'm guessing they will take advantage arbitrage profits
 - the whales will respond
 - the the exchange itself. ie would the exchange actually freeze everyone's account using the excuse that they are trying to create stability.

Happy trading!

fabozzi

(This was also discussed at this post but the post is somewhat old: https://bitcointalksearch.org/topic/the-market-effect-of-tether-collapse-and-our-survival-strategy-2878724)