If convicted, will Tether USDT crash the markets?

[SonoCoin]

As you all know, the U.S regulators have recently subpoenaed Bitfinex and Tether.

If the outcome is negative, will this impact the market or has it been priced in?

Submit your vote above.

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[Imfinnabeon]

I think it will, but that is because they are essentially a huge portion of the true amount of money in crypto. Not looking forward to what would happen if comes back negative, I think it could be catastrophic to crypto, even worse than an exchange hack (yes I just said that).

[SonoCoin]

I think it will, but that is because they are essentially a huge portion of the true amount of money in crypto. Not looking forward to what would happen if comes back negative, I think it could be catastrophic to crypto, even worse than an exchange hack (yes I just said that).

Do you have any idea when the proceedings will take place?

[mammothine]

Tether is only $2b of the $420b market, right?

[SonoCoin]

Tether is only $2b of the $420b market, right?

There isn't really 420bn in the market... that's just on paper. My guess is there is 25% of that, and tether volume produces a lot of the liquidity.

[stompix]

Tether is only $2b of the $420b market, right?

What $420 b market?
The same market that was at 700 billions , and with overall trades of 70 billions it went down by more than 150 billions ?

Stop looking at coinmarketcap.
Those numbers mean nothing, one single sell of 1m can bring a coin down by x100.

I think it will, but that is because they are essentially a huge portion of the true amount of money in crypto. Not looking forward to what would happen if comes back negative, I think it could be catastrophic to crypto, even worse than an exchange hack (yes I just said that).

I think the tether fiasco is already priced in by about half.
And even if tether will be gone (and I do hope it will), we have experienced this before with MtGox and their buying bot , willy.
Looking further in time in terms of years not day, a world without fiat crypto is way better.

[mammothine]

Stop looking at coinmarketcap.
Those numbers mean nothing, one single sell of 1m can bring a coin down by x100.

I hear you, but currently CMC is the best gauge of the size of the market. You can argue that coinmarketcap is bullshit because a single sale moves prices down, but you can say that about stocks or any other market in which we calculate the value of the whole by the price of a single issue. You are literally arguing against how everyone has agreed we would take stock of a market for the last 100 years, and that's fine, but that doesn't make my response less valid.

Currently, still, Tether accounts for $2B of assets against the widely agreed upon calculation of the whole market, which is currently (and perhaps, yes, incorrect in theory and execution) of $420B. If you are to argue that the market is not worth $420B, you can EASILY apply the same rationale to stocks and other such assets and essentially everything else all of civilization measures itself outside of GDP. But it still stands, 2B is a small fraction fo 420B, and while the optics are terrible, if it turns out to be a total fraud (highly doubtful, it's a tiny amount of money in the right perspective) it won't mean much, really.

[allthebitandbobs]

i doubt it with the chinese new year be over at the end of the month

[Washball]

If the outcome is negative, that could do some damage to cryptocurrencies. But the impact would not crash the market. 2.25 Bn is a lot, so it could harm the markets, but they'll survive.

[Sowik]

Lets all just hope that Tether are legit as I think its gonna have huuge impact on the market if they are not legit.

[clrpod]

It will certainly hurt the market, I think the promising thing is that a large majority of people fail to fully understand how a 2bn market cap coin can inflate something so much. What they fail to understand is that market cap isn't really a true reflection of the total worth of a market. The easiest way I think to look at it is this:

If every single bitcoin in the market was put up for sale right now at any price, we would not see them all sold at ~9.3k (or whatever price we are at now). The price would quickly fall and we'd probably see an average price much much lower, I would speculate about $2k but it's really impossible to tell.

The same example can be used to see why the market can be easily inflated. All it takes is for one person to be willing to buy at a high price to push the market cap up. (If you ever watch low volume coins on CMC you can see this happen often where someone pays over the odds and the market cap is greatly inflated).

The final easy example to see how this works is to follow any low price and low market cap coin that is often a target of pump and dumps, you can see how easily whales move the prices without ever actually having their orders filled, they can move the market by millions of dollars in market cap with a much smaller amount of funds.

[neite99]

somehow it will make people lose their confidence regarding the crypto markets resulting in fear and may block some new comers as well as exit some of investors but in long term its effect shouldn`t be very high.

[Hydrogen]

Tether is only $2b of the $420b market, right?

The media claims tether(USDT) printed "$80 billion dollars" out-of-thin-air to artificially prop up the price of btc.

I'm glad someone realizes the market cap of tether is only $2 billion.  

I hope people pose the question of whether $2 billion is enough to overinflate the value of bitcoin.

The media has a lot to answer for. They need extraordinary evidence to support their extraordinary claims. I think the investigation will only confirm the media's anti crypto bias in fabricating false tether info to sow fear and doubt in the minds of less experienced investors.

[RodeoX]

I don't think it will have any real effect. Alts are crypto for dummies. I really don't see how losing their money to this alt is any different outcome for them. They were likely to lose it anyway.

[danielhodous]

This is a Lehman brothers moment coming here so similar to the 2008 housing bubble

What?  
The one that is "crypto insurance”
The one that would truly rattle the market to maybe another 60%+ drop or more?

Tether.

Whether you are in tether or not it’s one that if proven to not be backed would trigger panic like no other.  
Zero faith to run and hide and hedge.  
All the other cryptos would start dumping to fiat, which would show the ineptitude of coinbase and others not being able to fund the "run on the banks".
The destruction of tether would take BTC to under $1000 I guarantee this.



The Crypto-cartels or as some call them Whales.
Only they can save the market by propping up AIG (sorry, tether).  
Our federal reserve (the crypto cartels) will have to save the cryptos from annhilation by showing a balance sheet of fiat large enough to back the one insurance policy we have Tether.
Which is PROBABLY why the market has gone down 50% since end of year... I imagine most of the CryptoCartels have sold off to prop up AIG (dammit sorry, Tether)

Think I’m wrong and wearing a tin foil hat.. that’s cool.  

I find it humorous that true believers in crypto and all its libertarian Utopian ideals.. have allowed a quasi federal reserve to form... not only with abilities to shape market conditions, change the supplies of our coins, manipulate price at their whim, Develop insurance scams against dips in market to protects us from massive failures (that shouldn’t exist!!!!).

Allowing them to get so much power in the first place and WE INVEST in a derivative like Tether, all the while it’s backed (supposedly) BY FiAT and we TRUST IN THAT?!?!!!!!  
Now we have to HOPE, and PRAY that our overlords can prop up Tether and back it by enough FIAT to prevent a market disaster of biblical proportions.


To quote the son at the end of Diggstown talking to his defeated father who scammed a town, and then, got out conned by a better con man in James Woods “You deserve to lose”.

[QuestionAuthority]

That depends on your definition of crash. Some will see a crash as they bought in at $9k and the usd exchange rate drops to $8k. This might happen but was it really bitfinex and tether that caused it? Some people see crash as bitcoin usd exchange rate is below $1. Never gonna happen.

Will it impact the market at all? Of course it will in the short term. Everything impacts the market to some degree. Will it have a lasting long term effect? Of course not.

[European Central Bank]

didn't people notice the recent Upbit declaration? they said they'd take on Tether's backing for their customers if something did happen to it.

this is classic BFX. they offload their obligations on others because they know that others are now too tangled up in their evil plans to let it fail. if tether really was shut down I think it would have a big effect.

those who claim it's priced in are either blinkered or not thinking it through.

it does depend on the nature of the shutdown. i think the most likely reason will be them flouting every law known to man. in that case it would suck.

if it was because it was comprehensively proven that tether's value had been conjured out of thin air all the way through, that's gonna be much more cataclysmic. it'll cause people to question the valuation of the entire market.

[minernoob1]

It will cause at least a short term crash for sure.

[RodeoX]

This is a Lehman brothers moment coming here so similar to the 2008 housing bubble

What?  
The one that is "crypto insurance”
The one that would truly rattle the market to maybe another 60%+ drop or more?

Tether.

Whether you are in tether or not it’s one that if proven to not be backed would trigger panic like no other.  
Zero faith to run and hide and hedge.  
All the other cryptos would start dumping to fiat, which would show the ineptitude of coinbase and others not being able to fund the "run on the banks".
The destruction of tether would take BTC to under $1000 I guarantee this.



The Crypto-cartels or as some call them Whales.
Only they can save the market by propping up AIG (sorry, tether).  
Our federal reserve (the crypto cartels) will have to save the cryptos from annhilation by showing a balance sheet of fiat large enough to back the one insurance policy we have Tether.
Which is PROBABLY why the market has gone down 50% since end of year... I imagine most of the CryptoCartels have sold off to prop up AIG (dammit sorry, Tether)

Think I’m wrong and wearing a tin foil hat.. that’s cool.  

I find it humorous that true believers in crypto and all its libertarian Utopian ideals.. have allowed a quasi federal reserve to form... not only with abilities to shape market conditions, change the supplies of our coins, manipulate price at their whim, Develop insurance scams against dips in market to protects us from massive failures (that shouldn’t exist!!!!).

Allowing them to get so much power in the first place and WE INVEST in a derivative like Tether, all the while it’s backed (supposedly) BY FiAT and we TRUST IN THAT?!?!!!!!  
Now we have to HOPE, and PRAY that our overlords can prop up Tether and back it by enough FIAT to prevent a market disaster of biblical proportions.


To quote the son at the end of Diggstown talking to his defeated father who scammed a town, and then, got out conned by a better con man in James Woods “You deserve to lose”.

None of those have any effect on my use of bitcoin. I don't touch alts because they always end up like this. It comes as zero surprise to me that Tether is not backed, I never thought they were. You have to set yourself up to take a fall with alts. I'm good with bitcoin.

[clrpod]

didn't people notice the recent Upbit declaration? they said they'd take on Tether's backing for their customers if something did happen to it.

this is classic BFX. they offload their obligations on others because they know that others are now too tangled up in their evil plans to let it fail. if tether really was shut down I think it would have a big effect.

That's quite good of upbit and it shows the situation we're in. It's so similar to that of when banks are going under and the other banks have to step in to help them out, it's not out of kindness, it's good business logic. If tether fails, the knock on to the whole of the crypto market would be huge. Coverting their customers 'losses' actually works out to be profitable.

those who claim it's priced in are either blinkered or not thinking it through.

There's no way anything like this could ever be priced in.

it does depend on the nature of the shutdown. i think the most likely reason will be them flouting every law known to man. in that case it would suck.

if it was because it was comprehensively proven that tether's value had been conjured out of thin air all the way through, that's gonna be much more cataclysmic. it'll cause people to question the valuation of the entire market.

How do you think that they could fabricate having funds that they didn't buy flouting every law known to man? I would think it's got to be a fairly clear cut thing, either they have the reserve funds or they don't.

It's one thing that's confused me about this whole situation. If they have the funds it shouldn't be hard to prove and if they don't it also shouldn't be hard to prove.