Bitcoin price- If Tether (USDT) go down, will it be good for Bitcoin?

[Person610]

I have no clue why people trusted it and it managed to last this long.
People will do anything for convenience and then they cry afterwards for the Nanny state to save them.

They trust it because it's lasted so long. Tether dodges every bullet. After 5 years, betting on them going down almost starts to feel like betting against Bitcoin.

The resilience of the dollar peg also shows that Tether redemptions are consistently flowing. If people panic sell their USDT, arbitrage traders who can redeem USDT just drive the market back towards $1. As a result, this stability gives confidence to the market. After all, as long as USDT stays pegged to $1 no one is losing value.

No, bitcoin is owned by no one
And cannot he charged by the govt, whereas tether is

[1715397440]

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[1715397440]

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[alexsandria]

I am quite sure bitcoin could handle this situation. Because if USDT were to be gone, people who rely on stable coins probably would dare to try getting shot at bitcoin, at least. Though on the other hand, as USDT act as bridge between crypto and trader/investor, the situation may turn out the least I expect.

[onyek16M]

Read an article on another lawsuit on Bitfinex controlled Stable coin Tether (USDT).

https://news.bitcoin.com/bitfinex-and-tether-receive-another-class-action-lawsuit-in-us-courts/

The operators of the cryptocurrency exchange Bitfinex and the stablecoin Tether have notified users that they were hit with another class action lawsuit in U.S. courts over market manipulation allegations that the companies are trying to frame as mercenary and baseless.

Now the question is, if Tether ever go down Will it affect the price of Bitcoin and the whole crypto ecosystem?

previously there is no relationship about USDT go down will affect with bitcoin price but its wrong, an another article show that USDT has relation with bitcoin. Tether used to pump bitcoin and both move together example in juli 2018 cryptocurrency go down at the same time USDT dropped too
then in august 2019 bitcoin pump from $6000 to $7000 of course the USDT also increase price

[The Sceptical Chymist]

However, if tether breaks and it turns out to be not backed up by USD

How would it break?  And isn't it always backed by USD?  I can't say I completely understand how the backing works, unless it's like how Libra is supposed to be, but it should always be pegged to the dollar.  And if that's true, then I'm not even sure how it can go down in value unless the dollar does.  That would actually create an arbitrage opportunity, because you could then buy Tether with dollars and wait until it stabilizes (I'm not an expert in arbitrage, but that's basically what currency traders do).

And man, if the US government is giving Tether such a hard time, I very much doubt they're going to let Facebook proceed with Libra.  Things are not looking good on that front.

[figmentofmyass]

However, if tether breaks and it turns out to be not backed up by USD

How would it break?  And isn't it always backed by USD?  I can't say I completely understand how the backing works, unless it's like how Libra is supposed to be, but it should always be pegged to the dollar.  And if that's true, then I'm not even sure how it can go down in value unless the dollar does.

earlier this year, outstanding tethers were only 74% backed by fiat equivalents. that's because bitfinex had a shitload of money seized by law enforcement and tether issued them a loan from customer deposits.

that's what the LEO token sale was all about---making tether solvent again.

USDT fluctuates both above and below $1 for multiple reasons. for example, when there is high demand from chinese traders, it trades at a premium. when there is high supply from tether FUD, it trades at a discount. but since it always returns to $1 we can assume arbitrage is in effect. if no one can get bank wires out of tether like in early 2017, arbitrage is impossible. during those times, USDT should trade at a significant discount.

[exstasie]

And man, if the US government is giving Tether such a hard time, I very much doubt they're going to let Facebook proceed with Libra.  Things are not looking good on that front.

It's mainly just the state of New York that's hassling Tether. In the scheme of things, they are rather impotent. I almost wonder if the NY AG is being used as a smoke screen to generate evidence for the federal government to build its cases.

The CFTC and DOJ did launch investigations into Bitfinex and Tether 1-2 years ago. For all we know they've been closed......or maybe the DOJ already has indictments under seal (like they did with BTC-e) and they are just waiting for the right moment to pounce. It's impossible to know.

[1Referee]

Perhaps short term we'll see a negative external shock, but in the long run, it barely matters.

I wouldn't say that. It's not easy to get something similar back where the capital remains inside the ecosystem. While fiat is being withdrawn, the outstanding Tethers can't be easily withdrawn because they're held by those not having a connection to Bitfinex. Throughout the whole bear market not much has been printed, but more importantly, not much has actually been withdrawn.

The capital in Tether that's not withdrawn will be pumped back into Bitcoin because no one wants to hold a stablecoin for too long. There is just too much risk attached to holding it.

[InvoKing]

The capital in Tether that's not withdrawn will be pumped back into Bitcoin because no one wants to hold a stablecoin for too long. There is just too much risk attached to holding it.

Risk to holding it and possibly other stable coins.. Traders may retract a little bit from using Tether but if this spread to other stable coins it may be harmful in a way or another to the actual trading system which may affect bitcoin/altcoins after all.. It is indeed hard to predict the damage that could be done but manipulations will make people think twice before joining cryptocurrencies world.

[Hueristic]

I have no clue why people trusted it and it managed to last this long.
People will do anything for convenience and then they cry afterwards for the Nanny state to save them.

They trust it because it's lasted so long. Tether dodges every bullet. After 5 years, betting on them going down almost starts to feel like betting against Bitcoin.

The resilience of the dollar peg also shows that Tether redemptions are consistently flowing. If people panic sell their USDT, arbitrage traders who can redeem USDT just drive the market back towards $1. As a result, this stability gives confidence to the market. After all, as long as USDT stays pegged to $1 no one is losing value.

This is true even when they were printing and pumping they covered the fractional reserve selling the bubble and hired that law form to publicly announce they had full backing. That added alot of legitimacy to a peg that has ZERO transparency.

Even with the NY Attorney General going after them and their millions seized in that polish bank I think they are Teflon.

[Person610]

I have no clue why people trusted it and it managed to last this long.
People will do anything for convenience and then they cry afterwards for the Nanny state to save them.

They trust it because it's lasted so long. Tether dodges every bullet. After 5 years, betting on them going down almost starts to feel like betting against Bitcoin.

The resilience of the dollar peg also shows that Tether redemptions are consistently flowing. If people panic sell their USDT, arbitrage traders who can redeem USDT just drive the market back towards $1. As a result, this stability gives confidence to the market. After all, as long as USDT stays pegged to $1 no one is losing value.

This is true even when they were printing and pumping they covered the fractional reserve selling the bubble and hired that law form to publicly announce they had full backing. That added alot of legitimacy to a peg that has ZERO transparency.

Even with the NY Attorney General going after them and their millions seized in that polish bank I think they are Teflon.

Who knows, only time will tell

[el kaka22]

For a short term it would be very bad for bitcoin, there would be a lot of people who will lose money and there will be a lot of people who will want to recover that from bitcoin and withdraw their coins and basically be chaotic for a long time. However in the end we will have a more stable (ironically) and decent market after tether is gone. So I say long term having no tether at all would help us out.

After all we are talking about a corrupt company with a corrupt bank in Bahamas who is no longer supporting their currency 1 to 1 backed anymore, it is not helping us at all right now but slowly draining money away from the market via their company, if they are gone the short term could be horrible but the long term recovery would help many people out and the market as well.

[Febo]

If Tether (USDT) go down, will it be good for Bitcoin?

It should be good. So far people day trade. If there would be no stable coins then they would more hold then day trade. Since when selling Bitcoin would have to pay taxes.   But. Tether is not the only stable coin. There are plenty and and more and more are coming. Libra soon, ....  So when tether goes down will be no changes.

[adaseb]

If Tether (USDT) go down, will it be good for Bitcoin?

It should be good. So far people day trade. If there would be no stable coins then they would more hold then day trade. Since when selling Bitcoin would have to pay taxes.   But. Tether is not the only stable coin. There are plenty and and more and more are coming. Libra soon, ....  So when tether goes down will be no changes.

No it would not be good. I don't think tether will collapse but in the off chance that it actually did, then it would be disastrous and even if you hold Bitcoin, your Bitcoin value would most likely decrease anyways because it would turn out that tether ended up being some scam and many people would just get out all together and just invest their money in the stock market.

Libra isn't really going to be a tether competitor, its going to be centralized and who knows if it will actually go live. When they announced it many of the government bodies stopped in and tried to stop it. By the way these meetings go, it could be years before Libra is actually released.

[darkangel11]

It's a stalemate at the moment. If USDT disappeared due to some major fuckup by bitfinex, the price of BTC and other altcoins would take a plunge. At the same time there's no way to simply erase it without causing a disturbance on the markets. It's ok while it works, but if something happens to it the price will go down.
I'd really prefer if it was never made, but since we have it we have to live with it for as long as possible.

[figmentofmyass]

If Tether (USDT) go down, will it be good for Bitcoin?

It should be good. So far people day trade. If there would be no stable coins then they would more hold then day trade.

people wouldn't stop trading. they would just hedge using regular fiat on exchanges instead. that's what everyone did before. they just used exchanges like mt gox, bitstamp, and btc-e instead of all the tether-backed exchanges (like binance) that exploded in popularity years later.

the genie is out of the bottle. if tether goes down, stablecoins aren't going away.

[Theb]

Now the question is, if Tether ever go down Will it affect the price of Bitcoin and the whole crypto ecosystem?

I think that the best way to answer your question is for you to answer this question. Is Tether the market leader in the crypto market at present? We all know that the market leader is the one that influences the prices and the ones below it technically has minor to no influence whatsoever with the one leading the market. As long as Bitcoin is not directly affected by the decision I don't see it being pulled down together with Tether since it is just an altcoin and has barely anything to do with Bitcoin's own demand and supply.

[exstasie]

As long as Bitcoin is not directly affected by the decision I don't see it being pulled down together with Tether since it is just an altcoin and has barely anything to do with Bitcoin's own demand and supply.

Tether isn't just an altcoin. People use it as a substitute for USD in the BTC markets and it has significant fiat inflows and outflows. People buy and sell BTC for it, so of course it affects BTC's supply and demand.

USDT (or USDT-linked) markets like Binance, Bitfinex, Bittrex, Poloniex, Okex, Huobi, etc. provide huge amounts of liquidity to the market so I would say Tether has a significant effect on price discovery.

[Theb]

As long as Bitcoin is not directly affected by the decision I don't see it being pulled down together with Tether since it is just an altcoin and has barely anything to do with Bitcoin's own demand and supply.

Tether isn't just an altcoin. People use it as a substitute for USD in the BTC markets and it has significant fiat inflows and outflows. People buy and sell BTC for it, so of course it affects BTC's supply and demand.

USDT (or USDT-linked) markets like Binance, Bitfinex, Bittrex, Poloniex, Okex, Huobi, etc. provide huge amounts of liquidity to the market so I would say Tether has a significant effect on price discovery.

I still don't see a direct relation to it being a crypto just to buy other cryptocurrencies which in turn can affect the price of Bitcoin directly. Using the same line of thinking if Tether is considered as a "substitute" for USD and it shut down then how can it directly affect the price of Bitcoin negatively when Tether itself cannot be used in the market? Yes if they have given them time to liquidate their Tether then we might even see other cryptocurrencies benefit from it since we will see Tether's market share go to other cryptocurrencies which I think the biggest beneficiary for it will be Bitcoin. Tether and any other stable coins just acts as a safe haven and a tool for them to transfer their money back to another crypto so there is really no way it has a direct affect on Bitcoin negatively.

[exstasie]

Tether isn't just an altcoin. People use it as a substitute for USD in the BTC markets and it has significant fiat inflows and outflows. People buy and sell BTC for it, so of course it affects BTC's supply and demand.

USDT (or USDT-linked) markets like Binance, Bitfinex, Bittrex, Poloniex, Okex, Huobi, etc. provide huge amounts of liquidity to the market so I would say Tether has a significant effect on price discovery.

I still don't see a direct relation to it being a crypto just to buy other cryptocurrencies which in turn can affect the price of Bitcoin directly. Using the same line of thinking if Tether is considered as a "substitute" for USD and it shut down then how can it directly affect the price of Bitcoin negatively when Tether itself cannot be used in the market?

Imagine a situation where several of the world's largest BTC exchanges all go down at once: billions of dollars in disposable capital waiting to enter the crypto markets disappears in a heartbeat. That's what Tether going down represents. If USDT goes to $0, that's $4 billion dollars in crypto trader/investor capital up in smoke, gone. A very large swathe of crypto investors/traders would have their disposable capital destroyed. That would have a huge negative effect on demand for BTC and crypto in general, not to mention the hugely negative effects on market sentiment.

[Hueristic]

Binance already lists at least 3 stablecoins so I'm not seeing this as being near as important as it would have been a few years ago. USDC and PAX are both available and I made a PAX Purchase and Withdrawal for testing and it only took hours. That is not an endorsement just an observation.