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Oh yes... thanks. You are absolutely right, Bitcoin would very well be negatively effected by a stablecoin crash, if it was held as collateral by the stablecoin company.
How did I miss that thought, when we just had the Luna debacle...
Probably because it was very much a black swan event worth forgetting
Kind of reminds me of BitConnect in 2018, getting into the Top 10 on CMC and being 100% ponzi as well.
Then blowing up spectacularly...
BitCon(nect) was fun though... so much meme
Actually, due to its "great" marketing a better meme coin than that dogshitcoin.
Luna was no fun at all for me. lol
Would be interesting to know how many Bitcoins are used as collateral for the different stablecoins.
As far as I know, and I'm far from expert here, there is very little exposure to Bitcoin from stablecoins.
DAI has a very small amount in Wrapped BTC, USDD is backed by Tron I believe.
The rest are either fiat-backed or too insignificant if they do back with BTC.
Ok. So good chances that Bitcoin would not be much affected as a collateral.
I just read that tether also holds seemingly a tiny amount in "digital currencies".
Just to get a feeling for the direct risk involved for the Bitcoin market.
Basically very little, apart from Wrapped BTC which is $3b / 150K BTC locked up, though is redeemable 1:1 and has
proof of reserves. So I won't worry about it.
WBTC would be the only risk I guess, but is different as not affected by Bitcoin's price, as it's a "stablecoin" pegged to BTC not dollar.
and technically, they wouldn't need to sell the BTC collateral on the BTC/USD market and tank the price, but just "give it back" to the WBTC holders