A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says

[Bitcoin Guy]

Just saw this article "A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says."

https://www.coindesk.com/a-sudden-loss-of-faith-in-tether-would-pose-risk-to-bitcoin-jpmorgan-says

I don't think so, but what do you think?

(Maybe I am naive, but is there any direct connections between Tether and Bitcoin?)

[fiulpro]

I do believe that it's more of a personal question, there are people who would sell their Bitcoins even after maybe 10% dump and there are people who would keep it even if the government of their country decided to ban it.

Bitcoins is not dependent on anyone or anything but the mentality of people are therefore there will always be people who would loose trust or might even sell their coins , but at the end of the day they would only make the price of Bitcoins good enough for the other people who are waiting on the sidelines to buy. We have surpassed 50k also I am stunned honestly ! These kinds of news are trying to make the situation more negative since there seems no stop for the positive position here. We have a lot of options, a lot of ATH , loosing trust in one would not make the whole crypto economy shake.



I do think that : It is for sure possible but 90% of the people trust Bitcoins for Bitcoins

[Poker Player]

And a sudden loss of faith in Bitcoin would pose risk to Bitcoin.

I don't deny that there could be some influence on the price, but there has been talk of Tether FUD for some time now and I don't see it clearly. As the fellow forum member says:

I do think that : It is for sure possible but 90% of the people trust Bitcoins for Bitcoins

[Khaos77]

Just saw this article "A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says."

https://www.coindesk.com/a-sudden-loss-of-faith-in-tether-would-pose-risk-to-bitcoin-jpmorgan-says

I don't think so, but what do you think?

(Maybe I am naive, but is there any direct connections between Tether and Bitcoin?)

Tether is being used as a fractional reserve scam to prop up the price of bitcoin.
If tether collapses, then all of the fake money propping up bitcoin also collapses, causing a price drop to $400 or below.
(Price before Tether started manipulating the bitcoin price.)
At this price the miners will all go bankrupt, and the btc network will freeze.

[Bitcoin Guy]

This is very true, btc is pegged to tether ...

Do you have supporting documentation on this?  I don't think BTC is pegged to anything though.  BTC is the father all cryptocurrencies and Tether came much later after (2015).

[Bitcoin Guy]

Tether is being used as a fractional reserve scam to prop up the price of bitcoin.
If tether collapses, then all of the fake money propping up bitcoin also collapses, causing a price drop to $400 or below.
(Price before Tether started manipulating the bitcoin price.)

Could you elaborate how Tether prop up the price of BTC?  And what do you mean by "price before Tether started manupulating the bitcoin price"?

Thanks to all your guys' inputs - very interesting.

[DooMAD]

People have been having this conversation for quite some time now, so I don't know why JPMorgan are only just starting to twig.  For "leaders" in the financial world, they're apparently pretty slow on the uptake. 

Having considered the issue for a longer period than they obviously have, I can't say I'm overly concerned.  If anything, people dumping Tether en-masse would likely result in wealth flooding into Bitcoin.  People should lose faith in USDT.  It's awful.  And once people understand why it's awful, Bitcoin only shines brighter in contrast.

[Khaos77]

Tether is being used as a fractional reserve scam to prop up the price of bitcoin.
If tether collapses, then all of the fake money propping up bitcoin also collapses, causing a price drop to $400 or below.
(Price before Tether started manipulating the bitcoin price.)

Could you elaborate how Tether prop up the price of BTC?  And what do you mean by "price before Tether started manupulating the bitcoin price"?

Thanks to all your guys' inputs - very interesting.

Tether did not start manipulating the crypto markets to a noticeable degree until 2017 according to the below forensic study.
Bitcoin price was ~$400 before the manipulations started. Personal Observation. 

https://www.cnbc.com/2019/11/04/study-single-anonymous-market-manipulator-pushed-bitcoin-to-20000.html

A forensic study found that tethers, a digital currency, being traded for bitcoins, revealed a pattern of manipulation during the 2017 cryprocurrency boom.

https://www.coindesk.com/another-class-lawsuit-claims-bitfinex-tether-manipulated-bitcoin-market

"Defendants' control of USD₮ issuances and Bitfinex permitted Defendants and their co-conspirators to coordinate purchases and sales with rising and falling Bitcoin prices. When Bitcoin prices were falling, Defendants and their co-conspirators printed USD₮s and artificially increased the price of Bitcoin. Once Defendants and their co-conspirators artificially inflated the price of Bitcoin, Defendants and their co-conspirators then converted the Bitcoin back into USD₮s to replenish Tether's reserves."

[pooya87]

First of all nobody with half a brain has any faith in any centralized altcoin specifically Tether that has also been very shady.
Secondly like any big altcoin that has also been used in the cryptocurrency market Tether could cause a lot of damage when it disappears. Bitcoin market is not an exception, it will be affected by the drama and the follow up FUD and bitcoin price could drop. But it will be a drop like any drop caused by any other big drama in the past. There is no "risk" to bitcoin though.
For example we saw a lot of massive exchanges be hacked and affect bitcoin market, even big shitcoin exchanges such as Binance affected bitcoin price. But only temporarily.

The bigger "risk" is to altcoins because the entire altcoin market has been relying on Tether specially during bitcoin bear trends. For example we saw during 2018 (when bitcoin was dropping) that Tether was being printed at a higher rate than 2017 to satisfy the need of the altcoin market as altcoin bag holders were trying to escape the dumping altcoins but didn't want to go to bitcoin either because bitcoin was dropping itself too (that drop was also causing the altcoin bloodshed).
So if anything, when Tether disappears all those shitcoin traders have nowhere else to go but back to bitcoin and that increases the bitcoin volume and reduces the "drama" effect on bitcoin price too.

[masterzino]

Just saw this article "A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says."

https://www.coindesk.com/a-sudden-loss-of-faith-in-tether-would-pose-risk-to-bitcoin-jpmorgan-says

I don't think so, but what do you think?

(Maybe I am naive, but is there any direct connections between Tether and Bitcoin?)

I must agree if Tether goes down, this will be a big problem for all cryptos because almost all stablecoins are in Tether.

A sudden Tether crash will lead to executions of orders with 20%-50% in all major exchanges, which will lead to mass disruption. Some people will buy coins 20%-50% cheaper, but the consequences will be harmful.

[Khaos77]

The bigger "risk" is to altcoins because the entire altcoin market has been relying on Tether specially during bitcoin bear trends. For example we saw during 2018 (when bitcoin was dropping) that Tether was being printed at a higher rate than 2017 to satisfy the need of the altcoin market as altcoin bag holders were trying to escape the dumping altcoins but didn't want to go to bitcoin either because bitcoin was dropping itself too (that drop was also causing the altcoin bloodshed).
So if anything, when Tether disappears all those shitcoin traders have nowhere else to go but back to bitcoin and that increases the bitcoin volume and reduces the "drama" effect on bitcoin price too.

Clueless in your opinion there.  

Altcoins don't depend on tether, most don't even have a tether market pairing.

Dogecoin is the most highly traded markets against lower priced altcoins.
People that actually trade in altcoins know this.

Also if tether crashes, who says traders will be able to move anywhere, the places that hold the highest risk from tether are the exchanges.
The exchanges all crash, and the people holding on those exchanges lose out, but this has no effect on network function unless the coin needs to be profitable to afford to keep mining, which bitcoin is the most at risk.
* Most altcoins cost less than a $1000 to run and maintain monthly, so they can more easily survive a prolonged price collapse, bitcoin can't! *
Because it is not like you can run a multimillion dollar warehouse full of asics at a loss of a few hundred thousand just to keep bitcoin alive.
Neither will the majority if the price vs fiat crashes.
Miners pay their bills in fiat, not bitcoin.

[Lucius]

USDT is backed with USD and some other things (as was explained to us a few years ago) when it was discovered that only 70% of the USDT was actually backed by the USD. In other words, if people start to lose faith in fiat (USD), then the same could happen with USDT - and if people really knew how easy it is to manipulate stablecoins they would never go in that direction to make it something completely normal and accepted.

JPM is generally very positive when it comes to BTC, but I have the impression that from time to time they also try to position themselves in such a way that if something goes wrong, they can always say that they have warned us of potential dangers. Yet those who have read the article to the end could find out one very important piece of information that still raises hope that people are slowly realizing that stablecoins are nothing but digital fiat which versus fiat can be frozen at any time even when stored in non- custodial wallet.

Part of that lack of heed may stem from the fact that during the price rally seen over the past 12 months, U.S. dollar-based trades have been, on average, larger than USDT-based trades, according to Kaiko Research. As such, the risk of a big price crash on the potential loss of confidence in tether appears low.

[pixie85]

I have no trust in USDt and agree that it could be a threat. I've been saying it for years!

It won't destroy bitcoin because bitcoin does not depend on tether. Rather tether depends on bitcoin because without bitcoin all altcoins would take a huge hit and nobody would care about trading for usdt anymore. They'd all be running away from the market and trampling over each other. The biggest threat of USDT is if they keep making it without any backing and people keep selling large amounts of BTC for it.

[Bitcoin Guy]

I must agree if Tether goes down, this will be a big problem for all cryptos because almost all stablecoins are in Tether.

A sudden Tether crash will lead to executions of orders with 20%-50% in all major exchanges, which will lead to mass disruption. Some people will buy coins 20%-50% cheaper, but the consequences will be harmful.

How are most of the stablecoins are in Tether?  Do people need to use Tether to buy stablecoins?  I know I can just use BTC or ETH to buy stablecoins without involving Tether.

Can someone tell me, mechanically, how can Tether manipulate the price of Bitcoin?

I do agree that if there are any major bad news happened to any of the bigger coins or exchanges, the whole crypto market will be affected in the short term. 

Also, how does Tether survive?  Is it centralized and managed by a small group of people? 

[DooMAD]

Also, how does Tether survive?  Is it centralized and managed by a small group of people? 

That would be Bitfinex.  It's astounding that either are still going based on how shambolic their business has been so far.

[crzy]

Also, how does Tether survive?  Is it centralized and managed by a small group of people? 

That would be Bitfinex.  It's astounding that either are still going based on how shambolic their business has been so far.

They are starting to create FUD so we can see the bear market again, but I don’t think Bitcoin will collapse just because of Tether, so far it is still stable and on a good position. There’s a lot of good options though that is already available in the market, we might see some correction if Tether collapse but the whole market will survive and that’s for sure because Bitcoin didn’t depend on Tether.

[Twinkledoe]

Also, how does Tether survive?  Is it centralized and managed by a small group of people? 

That would be Bitfinex.  It's astounding that either are still going based on how shambolic their business has been so far.

They are starting to create FUD so we can see the bear market again, but I don’t think Bitcoin will collapse just because of Tether, so far it is still stable and on a good position. There’s a lot of good options though that is already available in the market, we might see some correction if Tether collapse but the whole market will survive and that’s for sure because Bitcoin didn’t depend on Tether.

Exactly! I don't know why this JPMorgan is being so pessimistic with bitcoin? Bitcoin exists even without Tether. So why would it collapse if tether collapses? Maybe, he is just spreading fud for those ignorant users. But for crypto users, they are being hypocrite. Now, they can see that bitcoin will not crash as what they want. And instead, a lot of top companies are going into crypto, which they don't want to.

[yohananaomi]

Just saw this article "A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says."

https://www.coindesk.com/a-sudden-loss-of-faith-in-tether-would-pose-risk-to-bitcoin-jpmorgan-says

I don't think so, but what do you think?

even though it is known as the largest financial securities in the world from America, we cannot conclude what will happen to bitcoin, besides that it also participates like @elonmusk to buy bitcoin, so we can be sure that there will be an impact that will occur. if only as an observer of securities and financial firms, we cannot guarantee it with other observers who have always been vocal but have never influenced anything with the movement of bitcoin and crypto in general.

This is just rhetoric in all the securities trading and financial observations that cannot be sure if it can be properly fulfilled because he did not go directly into it or sell the bitcoin he owns, but that cannot prove either.

[TastyChillySauce00]

Just saw this article "A Sudden Loss of Faith in Tether Would Pose Risk to Bitcoin, JPMorgan Says."

https://www.coindesk.com/a-sudden-loss-of-faith-in-tether-would-pose-risk-to-bitcoin-jpmorgan-says

I don't think so, but what do you think?

(Maybe I am naive, but is there any direct connections between Tether and Bitcoin?)

I must agree if Tether goes down, this will be a big problem for all cryptos because almost all stablecoins are in Tether.

A sudden Tether crash will lead to executions of orders with 20%-50% in all major exchanges, which will lead to mass disruption. Some people will buy coins 20%-50% cheaper, but the consequences will be harmful.

I believe after that the whole market will recover in no time as there are many stablecoins out there that willingly replace USDT position as the most used stablecoin.
It's not like the whole crypto market is entirely depend on the existence of USDT remember the day before stablecoin even a thing, and to find replacement for such thing is definitely very easy. Though that's just my guess without considering all other complicated factors that might be unknown to me.

[meanwords]

I must agree if Tether goes down, this will be a big problem for all cryptos because almost all stablecoins are in Tether.

A sudden Tether crash will lead to executions of orders with 20%-50% in all major exchanges, which will lead to mass disruption. Some people will buy coins 20%-50% cheaper, but the consequences will be harmful.

How are most of the stablecoins are in Tether?  Do people need to use Tether to buy stablecoins?  I know I can just use BTC or ETH to buy stablecoins without involving Tether.

I think he meant the most famous stablecoin out there. There's no doubt about it since the majority of Bitcoin trades are traded in USDT, it even outshines altcoin trades.

Anyway, it's not like it's the end of Bitcoin when people suddenly lose trust on USDT. By far USDT is probably the most suspicious stablecoins out there because of lack of audits and reports on their assets so other predators (other famous stablecoins) will likely try to market their coins to replace the spot of USDT.

I don't think there's going to be any big problem since people have a lot of choices to make. Either use another stablecoin, withdraw their money from exchanges, or use altcoins just like the old days. Sure there's going to be FUD happening that will affect all cryptocurrency (since almost every altcoin is using USDT for trades) but that's only temporary.