But if tether were to collapse wouldn't that push the market upwards? Everyone would want to get rid of tether and exchange it for any other coin at any price, right? Unless tether stops working as a currency and literally can't have any transactions people would just transfer their usdt into any coin pushing the price upwards.
if you sell Dogecoin for bitcoin, will bitcoin price go up? the same is true about Tether. if it falls and people start selling it for other coins (like selling it to get bitcoin) those coins prices won't go up. not that in case of a fall Tether will no longer be worth $1, so for example you have to exchanges 50,000 tether for 1
BTC.
but the price may drop only because of panic. mainly because fall of Tether means fall of one of the biggest exchanges (bitfinex) and that can cause panic and panic sells to follow and price to go down.
But a tether would still be a tether even if it ''collapses''. The only way it fails is if it's confirmed that they can't back every tether with dollars. It would be weird because even if that happens there is no reason for cryptocurrencies to fall in price compared to tether
i agree that there is no reason for price to drop but it will happen. @gentlemand above gave an interesting answer. it is about Perception
for example back when Bitfinex was hacked in 2016 there was no reason for bitcoin price to drop but people still panicked and crashed the market about 33%
I understand the point of about perception. It's like that most of the times, most news have literally no real impact on cryptos themselves but prices are still affected by them. My point was that if tether would still be 1 tether, everyone would be buying bitcoin or any other tether pair at any price just to get rid of tethers pushing the price up.
