What will happen to Tether?

[guydin]

I don't think that the price of USDT will decrease or increase, because many people are using it as a stable coin and use it for buying any coin in the dip. If the USDT becomes unstable then many people can get a big loss.

USDT is a coin whose value is the same as dollars in real life, so that value will always follow the base value of the dollar and it will not be possible to go down like other coins, that's why USDT is said to be a stable coin and is often used by many people to save their assets before making another coin purchase.

Actually even fiat-pegged stablecoins like Tether and USD coin can sometimes deviate from their original price. Just look at the USDT chart in 2019. It was below 0.97 at some moments.
It happens when people trade more actively than usual, but, as a rule, it is fixed by arbitrageurs quite quickly. Also stablecoins collapse when people stop trusting them. But I hope it will not happen to Tether, as according to audits its company has required collateral.

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[capoeira]

Also stablecoins collapse when people stop trusting them.

that's why I asked what makes them stable.
they are not realy stable.
it's just that offer and demand are pretty balanced, because there is no reason to hold them for gains.
this makes them kind of stabe, but there is no garantee. if for some reason people want to get rid of them one day the price colapses

[Abiky]

To my understanding Tether is the cryptocurrency created and backed by Bitfinex. If they become bankrupt and stop operating as an exchange what will happen to all the tethers in circulation? Will it all lose value also? Will Bitfinex have the responsibility to exchange them for real us dollars?

If Bitfinex goes down the drain, it'll be the end of Tether as we know it. That is if another company doesn't adopt Tether as its own. My guess is that once Tether loses value, most crypto assets will crash. That's largely because the crypto market is directly tied to USDT (although Bitcoin is still the reserve cryptocurrency of the market). It'll take quite some time before everything goes back to normal.

There are many stablecoins on the market right now, so if Tether goes down, another one will replace it. USD Coin seems like a great candidate due to its high liquidity and mainstream acceptance. I don't think Bitfinex will be responsible to pay back its investors in US Dollars if it declares itself bankrupt (I'm not a lawyer anyways). There will be big losses (and lawsuits) if that happens, since many investors will lose money big time. That's what you'd get when you trust a centralized stablecoin like Tether. Only time will tell us how everything will unfold as governments impose regulations against the stablecoin industry. Just my opinion

[electronicash]

what could be the reason why bitfinex will die?

i always thought usdt is too big to fail. and there were cointelgraph articles that tether was being investigated and its audited which they do have thee real usd reserve.

before tether will fall i think we'd all be warned to be able to move to another.

[dezoel]

It will be eventually turn out to be one of the biggest ponzi schemes in the world. They do not even have more than 5% of their money in cash, which means that the moment everyone of us end up cashing out our money you will see that the price of it will slowly start to go down and that is what the main problems seems to be because it can't go down in price, it is stuck to 1 dollar and if it really drops and nothing is done about it, then we are going to end up seeing it crash, if you do not cover it under 95 cents, then it might as well be 1 cent as well.

I have always said that these are criminals doing a criminal job and they should be arrested, this has always been the case for me, and they are not even properly audited neither, which is why I will never own any USDT at any point, only small amount that I am sent after a job but I cash that out right away.

[capoeira]

whats up with that too big to fail talk?
no country will inject money into Bitfinex to safe the crypto comunity.
who you guys think would safe it? serious question

[Noruka]

whats up with that too big to fail talk?
no country will inject money into Bitfinex to safe the crypto comunity.
who you guys think would safe it? serious question

This is actually an interesting point you are bringing up here. If Tether was backed by a bank, it would indeed might have been bailed out by a government. Now that it is a crypto company, governments will let it die with enjoyment. That's where the hostility comes into play towards cryptocurrencies. These bank bailouts back at the time were a big fat joke because it is not like the whole banking sector changed afterwards. They are still trading faulty products, selling that stuff to people who have no clue what they are buying.

[capoeira]

If Tether was backed by a bank, it would indeed might have been bailed out by a government

the thing is, it is NOT system relevant. it wont cause a snowball effect for the general economy, and the crypto economy is not realy relevant

[Noruka]

If Tether was backed by a bank, it would indeed might have been bailed out by a government

the thing is, it is NOT system relevant. it wont cause a snowball effect for the general economy, and the crypto economy is not realy relevant

I guess you are right here, but what isn't systemically relevant today could still become systemically relevant in a couple of years from now. If Tether doesn't fail for some reason over the next couple of years, I can very well imagine how it is going to turn over trillion per day, not billions anymore. It might be accepted by merchants who have and more Tether on their balance sheets because it's easy, cheap, and stable. It might become relevant by then.

[7788bitcoin]

To my understanding Tether is the cryptocurrency created and backed by Bitfinex. If they become bankrupt and stop operating as an exchange what will happen to all the tethers in circulation? Will it all lose value also? Will Bitfinex have the responsibility to exchange them for real us dollars?

If Tether goes down i am sure they will file for bankruptcy and anyone who is holding the coin will not be getting anything and in the next 5 years if they are able to survive i will be surprised. They have a court hearing in 2022 and will see what will happen during the hearing and the biggest problem is their transparency and they have not even pegged with US dollar as only a small percentage is pegged with US dollars.

[bitcoin-shark]

I do not think that if bitfinex were to fail or interrupt activities tether will disappear , many other exchanges use it at a widespread level, perhaps there would be fluctuations in its value and that is all

[Noruka]

To my understanding Tether is the cryptocurrency created and backed by Bitfinex. If they become bankrupt and stop operating as an exchange what will happen to all the tethers in circulation? Will it all lose value also? Will Bitfinex have the responsibility to exchange them for real us dollars?

I do believe Tether has reached a point of too big to fail because if this event happens that would result in a big dip in the crypto space. Assuming Bitfinex become bankrupt and the founders do not want to run away with the remaining reserve, I can see them liquidating their reserves and also understands that Bitfinex is one of the largest holder of Bitcoin too, which is a huge insurance against things like this

Tether's circulating market cap is 62 billion USD right now. I think that if there is something fishy going on with Tether, Bitfinex would be in a hell of trouble. They might be among the largest holder, but I doubt they have tens of billions of USD they could just liquidate within moments to cover any problems that might arise. I could be wrong though, maybe they are that huge and hold 5% or even more of bitcoin, but who knows.

[ayan9167]

Tether is the third-biggest cryptocurrency in the world by market value. And it's got some economists — including an official at the U.S. Federal Reserve — worried.

Last month, Boston Fed President Eric Rosengren raised the alarm about tether, calling it a potential financial stability risk. Meanwhile, some investors believe a loss of confidence in tether could be crypto's "black swan," an unpredictable event that would severely impact the market.

[sana54210]

To my understanding Tether is the cryptocurrency created and backed by Bitfinex. If they become bankrupt and stop operating as an exchange what will happen to all the tethers in circulation? Will it all lose value also? Will Bitfinex have the responsibility to exchange them for real us dollars?

If bitfinex faces any problem, then I guess tether will be dumped at first hand regardless of it is a stable coin. (Yeah, even a stable coin do fluctuate in exchanges according to supply&demand).

There have been many similar topics about the dangers of depending on a central entity for any purposes but hardly this community or entire crypto space learned anything out of that, it seems. Some times back some one conducted a naming contest for a decentralized stablecoin. I mean a truly decentralized stablecoin must be a permanent solution here rather than simply making use of tether with a secondary thoughts.

[Teknisi88]

Most of the founding organizations of crypto maintain long-term banking relationships, whereas Tether seems to have a hard time doing so.
In recent times, Tether has experienced volatile movements and this has made investors worried.
some investors are concerned that the issuer of Tether does not have sufficient dollar reserves and that Tether is starting to become unstable.

[mindrust]

To my understanding Tether is the cryptocurrency created and backed by Bitfinex. If they become bankrupt and stop operating as an exchange what will happen to all the tethers in circulation? Will it all lose value also? Will Bitfinex have the responsibility to exchange them for real us dollars?

The same thing that happened to other scams. It will keep scamming people till there is nobody left to scam.

I was mad af when their balance sheets became as big as $9b and they are now above $60b. Not only that I believe coinbase and busd are also as scammy as tether. Now they are getting bigger because it looks like tether cannot get any bigger anymore.

[ReiMomo]

New and interesting to speak about Tether. My question is, why it should fall under bankruptcy. A stable cryupto currency, used by vast traders to hold their crypto value stable in crypto wallet, has more rooms to circulate it and keep it more live, what makes you to think it would fall into bankruptcy. Just curious to know. I am a trader and i do always trade coins with USDT pair. I would be the one who will be disappointed if tether is not in the market.

[eaLiTy]

New and interesting to speak about Tether. My question is, why it should fall under bankruptcy. A stable cryupto currency, used by vast traders to hold their crypto value stable in crypto wallet, has more rooms to circulate it and keep it more live, what makes you to think it would fall into bankruptcy. Just curious to know. I am a trader and i do always trade coins with USDT pair. I would be the one who will be disappointed if tether is not in the market.

If you knew how the developers earn money for every coin they add in the market and the promise they give you is that all the coins that are in circulation is backed by US Dollar and now it is clear that less than 10% is backed by dollars and the rest are held in other assets that are risky in nature. What do you think will happen when the risky assets goes to zero and what would be the valuation of the USDT you are holding.

[Fivestar4everMVP]

Many people including myself have had this concerns for some time now, and me personally have limited my use of tether as many articles I read online on how it's likely to fail and also coupled with the rumored issue it has with the US government, I don't trust this crypto currency anymore but we just can't still ignore the fact that it's still one of the most popular and most used stable coins in crypto currencies so far.
The conclusion of the matter is that, if you don't feel secure in its usage, then better to avoid it and look for some other trusted stable coins to make use of, money is hard to come by this days and shouldn't be risked on untrusted crypto coins.

[Noruka]

Many people including myself have had this concerns for some time now, and me personally have limited my use of tether as many articles I read online on how it's likely to fail and also coupled with the rumored issue it has with the US government, I don't trust this crypto currency anymore but we just can't still ignore the fact that it's still one of the most popular and most used stable coins in crypto currencies so far.
The conclusion of the matter is that, if you don't feel secure in its usage, then better to avoid it and look for some other trusted stable coins to make use of, money is hard to come by this days and shouldn't be risked on untrusted crypto coins.

Absoutely, and considering it from the angle of its practicality, it plays a very vital role for cryptocurrencies and exchanges. I thought when 'I first read that one of the big Bitcoin pumps could have been facilitated with non-backed Tether that that hypothesis or allegation, whatever you wanna call it, does make a lot of sense. Imagine you are sitting on tons of Bitcoin and you have this printing button at your disposal because you are the company behind Tether, how tempting must it be to just push the button, use those freshly printed Tether and pump Bitcoin straight to the moon, sell your Bitcoin at crazy prices and then buy back the Tether with your profits such that nobody gets angry and asks for further investigation. Seems to be a decent plan to me.