What happens if USDT falls down?

[Franctoshi]

And stable coins are worse in the sense that at least fiat currencies can still survive someway or another as a government is backing them, but if the company behind USDT collapses then the value of the stable coin will go to zero.

We all saw what happened to the TUSD, the damage it did to the crypto space when it depeged from the US dollar, a lot of investors lost their life-saving just in a matter of minutes as a result of that event and coming to USDT, the same thing could happen to USDT no matter the amount of money used in backing it up and the team behind the project, all we pray is for such thing not to occur again in the history of concurrency.

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[miruha333]

And stable coins are worse in the sense that at least fiat currencies can still survive someway or another as a government is backing them, but if the company behind USDT collapses then the value of the stable coin will go to zero.

We all saw what happened to the TUSD, the damage it did to the crypto space when it depeged from the US dollar, a lot of investors lost their life-saving just in a matter of minutes as a result of that event and coming to USDT, the same thing could happen to USDT no matter the amount of money used in backing it up and the team behind the project, all we pray is for such thing not to occur again in the history of concurrency.

I agree, but there are people who assure me that a decoupling from the dollar can't happen. What fools... The behaviour of the cryptocurrency market cannot be predicted, let alone the rise or fall of tokens. Cryptocurrency is always a risk, you cannot be sure that everything will be fine.

[bitgolden]

It makes no sense to scam USDT otherwise cryptocurrency trading will be lost. I assume that the government is behind the USDT

Is not it better for you to take a look at which party that is behind USDT rather than blindly accusing the government was behind USDT? It's a bit hard to understand what you are going to say. The fact that if USDT can depeg anytime.
The price keeps stable caused it has reserved funds that used to keep it. You shall aware about USDT is controlled by the company. The government is not having ability to access it without owning the key to the contract.

The mechanism in the blockchain has been preventing the government from seizing it at least not for now. Did you remember the case of USTC? It's collapse due to the mistake that being made by the company itself.
The government ever touch it. That proves that when USDT may collapse and you shall accuse the company who is behind it as the main actor that was making the price of USDT plunged.

I remind you that even USDT has been plunged so many times even though it was not so significant.

I mean I think he just mean that he "assumes" that USDT is behind it, like CIA or something, which I know sounds silly but if you learn about what CIA did back in the day, the things that are public information right now, you will realize that there is nothing they won't do to hurt people.

The entire existence reason for CIA is to create disability that is not working for the government, and they are untouchable by the government as well, they are so powerful that anyone from the government tries to hurt them back? They will just attack full force and destroy their career for even attempting it. This is why I believe that it is going to end up being a little different on the long run, and could be considered different.

[Huppercase]

If you recall what happened to USTC, I mean the Tera classic stable coin? It wasn't backed by anything other some portion of some BTC and their tokens. It was an experiment meant to succeed beyond the space of USDT but failed when Bitcoin price start dumping and when some people saw some flaws in the Defi, they made use of it to manipulate the price and short the he'll living out of the stable coin and today, it's worth nothing, all investment down the drainage.

UST had an impressive LFG fund which was the collateral for LUNA, this fund had tens of billions of dollars in bitcoin. The main problem was that UST was giving an unrealistic interest rate, almost 20%. At that rate, you need a constant inflow of new money. It was more like some kind of pyramid scheme, where the pyramid lives if there is a constant inflow of new money. Because of the problems in tokenomics, LUNA faced hyperinflation and even a huge fund could not save the situation. Apparently they realized that the situation cannot be saved and it is easier to sell off all bitcoins than to try to keep UST from de-peg.

Yet the unrealistic interest rate was used to attract people to locked their token on the protocol without reviewing the implication of what they did, more like a genocide and greed and they all fell for it. Selling the Bitcoin was the greatest mistake because they know very well that BTC is backbone of everything, they held billions worth of it which people has many believe in, it was a red flag to do that even for the purpose of the general market. I just think that UST was a test protocol that was poorly designed during the bullrun, it would have been better during a time like this when there there is no too much greed and excitement.

It's kind of even funny that CZ and many OGs Venture capitalist regret ever coming to the market. If Luna and FTX were to be still alive today, maybe the market will be stable and have much trust than the way it is now, it will take a lot of effort for us to go back there again, even Elon is gradually exiting the space.

[Xal0lex]

UST had an impressive LFG fund which was the collateral for LUNA, this fund had tens of billions of dollars in bitcoin. The main problem was that UST was giving an unrealistic interest rate, almost 20%. At that rate, you need a constant inflow of new money. It was more like some kind of pyramid scheme, where the pyramid lives if there is a constant inflow of new money. Because of the problems in tokenomics, LUNA faced hyperinflation and even a huge fund could not save the situation. Apparently they realized that the situation cannot be saved and it is easier to sell off all bitcoins than to try to keep UST from de-peg.

Yet the unrealistic interest rate was used to attract people to locked their token on the protocol without reviewing the implication of what they did, more like a genocide and greed and they all fell for it.

All success here is based only on human vices. If an investor is promised a high return, the investor's critical thinking is turned off and he is ready to take his money anywhere, as long as he is promised big winnings. Not all investors are like this, but a lot of them are.

I just think that UST was a test protocol that was poorly designed during the bullrun, it would have been better during a time like this when there there is no too much greed and excitement.

UST is an algorithmic stablecoin, and all algorithmic stablecoins have shown their complete failure and subsequently many companies abandoned such projects, and those companies that had already managed to launch their algorithmic coins quickly abandoned them, for example, NEAR.

[Abiky]

We know that USDT is coming back from the most horrific situations from the past. But I want you to answer this, what do you do if someday without any signs USDT falls back to 0.1-0.2$? What do you do? Can you survive in this situation? What do you do if you put all your assets in USDT?

Just curious to know your answer. Don't say reasons that it won't happens, because I want to know if something this kind of thing happens in future what will you do?

If you ask my replay to this, I can say I will ok with it. Because I put my 20% into USDT right now. Why? because you know guys there is an Old saying Never put your all eggs in the same basket. 

Exactly. You'll never know if USDT loses its value in the future due to bankruptcy, a hack, or any other undesired event. Investing into it is like playing the "Russian Roulette". After all, stablecoins are NOT backed by the government. If you want to be safe, cash out to Fiat instead. Things don't last forever, anyways.

Once CBDCs are launched (especially the US Digital Dollar) you can say goodbye to stablecoins for good. I'd be surprised if somehow Tether manages to survive the constant pressure of the regulators. If it's still afloat, then it could live alongside CBDCs for a very long time. No one can predict the future, so lets hope for the best. Just my thoughts

[wxa7115]

Exactly. You'll never know if USDT loses its value in the future due to bankruptcy, a hack, or any other undesired event. Investing into it is like playing the "Russian Roulette". After all, stablecoins are NOT backed by the government. If you want to be safe, cash out to Fiat instead. Things don't last forever, anyways.

Once CBDCs are launched (especially the US Digital Dollar) you can say goodbye to stablecoins for good. I'd be surprised if somehow Tether manages to survive the constant pressure of the regulators. If it's still afloat, then it could live alongside CBDCs for a very long time. No one can predict the future, so lets hope for the best. Just my thoughts

This is coming, governments are not going to allow for centralized stable coins to keep on existing much longer, if they can make them disappear then a lot of traders will switch and will begin to use their CBDCs, and this means they will be able to ask them all kind of questions about the source of their funds.

And if they do not like what they hear they can easily block them and keep their coins, but for this future to come to happen independent stable coins need to be destroyed, which is why we are seeing the pressure on stable coins increasing lately.

[Rabata]

We know that USDT is coming back from the most horrific situations from the past. But I want you to answer this, what do you do if someday without any signs USDT falls back to 0.1-0.2$? What do you do? Can you survive in this situation? What do you do if you put all your assets in USDT?

Just curious to know your answer. Don't say reasons that it won't happens, because I want to know if something this kind of thing happens in future what will you do?

If you ask my replay to this, I can say I will ok with it. Because I put my 20% into USDT right now. Why? because you know guys there is an Old saying Never put your all eggs in the same basket. 

It is difficult to say what will be happen in the future. As stable coins were depegged in the past, the USDT could be the same. However, if such situations happens, then the crypto market face a long-term crisis. I also agree with you that not all eggs are put in the same basket. As cryptocurrencies are risky so we should invest accordingly in research and discussion. So to reduce the risk one must invest in different platforms.

[Abiky]

This is coming, governments are not going to allow for centralized stable coins to keep on existing much longer, if they can make them disappear then a lot of traders will switch and will begin to use their CBDCs, and this means they will be able to ask them all kind of questions about the source of their funds.

And if they do not like what they hear they can easily block them and keep their coins, but for this future to come to happen independent stable coins need to be destroyed, which is why we are seeing the pressure on stable coins increasing lately.

The only way stablecoins will survive is if governments adopt them as their own. Something like a partnership between the issuing company and the government itself. That would eliminate the need for central banks to reinvent the wheel by launching their very own digital currency (CBDC). But there's a small chance this will happen in the future, as governments always want control over everything. We can say bye-bye to Tether for good once governments decide (especially the US government) to hit the "kill switch". It would be easy enough to shut USDT down because of its centralized nature.

I'm pretty sure a USDT collapse would be a huge blow to the crypto market. Prices will decline for a prolonged period of time. No one can predict the future, so lets hope for the best. Just my opinion

[Ultegra134]

And stable coins are worse in the sense that at least fiat currencies can still survive someway or another as a government is backing them, but if the company behind USDT collapses then the value of the stable coin will go to zero.

We all saw what happened to the TUSD, the damage it did to the crypto space when it depeged from the US dollar, a lot of investors lost their life-saving just in a matter of minutes as a result of that event and coming to USDT, the same thing could happen to USDT no matter the amount of money used in backing it up and the team behind the project, all we pray is for such thing not to occur again in the history of concurrency.

Do you mean UST? Because TUSD also depegged, that's true, but it didn't have any long-term effects on the market, as it quickly rebounced and recovered within a few days. The truth is that no stablecoin can practically be trusted 100%, as USDT is said to be backed by actual dollar reserves. It has depegged in the past, but it wasn't too major, as it always quickly returned to normal. Would it be possible to completely lose the 1:1 peg and go as low as $0.40? I'm not sure, but if something like this were to happen, it would cause chaos in the cryptocurrency market due to the extravagant market cap, and investors would be switching to other stablecoins, with the possibility of unstabilizing them too.

[passwordnow]

I'm pretty sure a USDT collapse would be a huge blow to the crypto market. Prices will decline for a prolonged period of time.

It will. We can take the example during the time when there was a continuous printing of Tether. IIRC, that was around 2016-2017 and that certainly created an impact as those were the years like we're in a bull run. The thing here is that those printed USDTs were used to buy and stack more of Bitcoin for Bitfinex.

No one can predict the future, so lets hope for the best. Just my opinion

Yep, it's always unstable, volatile and risky but we've been used to that scene and hoping that we get another unexpected and greater bull run without any failure from any of these big cryptos.

[Blitzboy]

This is coming, governments are not going to allow for centralized stable coins to keep on existing much longer, if they can make them disappear then a lot of traders will switch and will begin to use their CBDCs, and this means they will be able to ask them all kind of questions about the source of their funds.

And if they do not like what they hear they can easily block them and keep their coins, but for this future to come to happen independent stable coins need to be destroyed, which is why we are seeing the pressure on stable coins increasing lately.

The only way stablecoins will survive is if governments adopt them as their own. Something like a partnership between the issuing company and the government itself. That would eliminate the need for central banks to reinvent the wheel by launching their very own digital currency (CBDC). But there's a small chance this will happen in the future, as governments always want control over everything. We can say bye-bye to Tether for good once governments decide (especially the US government) to hit the "kill switch". It would be easy enough to shut USDT down because of its centralized nature.

I'm pretty sure a USDT collapse would be a huge blow to the crypto market. Prices will decline for a prolonged period of time. No one can predict the future, so lets hope for the best. Just my opinion

Governments' involvement with stablecoins? Interesting, but a little too perfect. Why? Centralized groups could shut down something like USDT, but doing so could cause a big fuss among crypto fans.

Now, heres where you're missing the bigger picture - stablecoins are merely an intermediate step! If you will, a bridge. As cryptos spread around the world and develop, they will become the new stable. They will be the gold standard that all other currencies try to match. So, lets say that Tether goes down. Its just a step. The end of one stablecoin wont cause the crypto world to fall apart. Prices going down? Trouble in the short run.

This is how technology has changed. It is bigger than both USDT and government banks. Think big picture, not small. And yes, there may be mistakes in thinking here, but isnt that what forecasting is all about?  So, while we're in the "what-if" limbo, lets not lose sight of the bigger picture.

[|MINER|]

I don't believe a hundred percent in any point in the crypto currency world other than Bitcoin. So I always try to hold most of my funds in Bitcoin. But sometimes something is held in USDT that is temporary. If we see many big alternative coins have fallen in the past few incidents. I hope no such incident happens with USDT, but if it does, it will undoubtedly be a huge disaster in the cryptocurrency world.

[Abiky]

Governments' involvement with stablecoins? Interesting, but a little too perfect. Why? Centralized groups could shut down something like USDT, but doing so could cause a big fuss among crypto fans.

Now, heres where you're missing the bigger picture - stablecoins are merely an intermediate step! If you will, a bridge. As cryptos spread around the world and develop, they will become the new stable. They will be the gold standard that all other currencies try to match. So, lets say that Tether goes down. Its just a step. The end of one stablecoin wont cause the crypto world to fall apart. Prices going down? Trouble in the short run.

This is how technology has changed. It is bigger than both USDT and government banks. Think big picture, not small. And yes, there may be mistakes in thinking here, but isnt that what forecasting is all about?  So, while we're in the "what-if" limbo, lets not lose sight of the bigger picture.

The idea has always been to replace the middleman. Banks will eventually fail as people begin to lose trust in them. With rising inflation rates, and economic uncertainty, we might see a future where decentralization will be the cornerstone of the mainstream economy. This means no banks and no evil corporations behind everything. People would be in-control of their money via the use of decentralized cryptocurrencies such as Bitcoin and Litecoin. The odds of this happening are very slim, especially when the world is still stuck with the "Fiat standard". Expect stablecoins to be relevant in the time being. Crypto is still in its early days, so let's give it some time and see what happens. Who knows if USDT's rise to glory will be short-lived? Just my thoughts

[poodle63]

the aftermath would certainly will be massive, you can imagine when a coin with market capitalization that reaches $82 billion collapse, you can almost sure that it spell chaos.

I don't believe a hundred percent in any point in the crypto currency world other than Bitcoin. So I always try to hold most of my funds in Bitcoin. But sometimes something is held in USDT that is temporary. If we see many big alternative coins have fallen in the past few incidents. I hope no such incident happens with USDT, but if it does, it will undoubtedly be a huge disaster in the cryptocurrency world.

there is most certainly always chance that something like USDT might be collapsing in the future, no one expected that TUSD was gonna be falling back then but it falls anyway.
same thing with USDT, thats why with the emergence of the latest paypal USD stablecoin and the other, it just gives option to diversify the coin not entirely depends on just one coin which might means that our assets are doomed whenever they are collapsing.
with diversifying we could anticipate such things from happening considering the fact that these stablecoin are usually ran by some companies that have different management and transparency in regard of their reserved assets for their stablecoin.
but I believe that USDT will not easily fall as many pictured out to be but better prevent anything bad from happening to our assets.

[DabsPoorVersion]

I'm pretty sure a USDT collapse would be a huge blow to the crypto market. Prices will decline for a prolonged period of time.

It will. We can take the example during the time when there was a continuous printing of Tether. IIRC, that was around 2016-2017 and that certainly created an impact as those were the years like we're in a bull run. The thing here is that those printed USDTs were used to buy and stack more of Bitcoin for Bitfinex.

I agree, this will make a huge impact as it is the largest stablecoin. We can't still deny that most people use USDT than any other stablecoin.

No one can predict the future, so lets hope for the best. Just my opinion

Yep, it's always unstable, volatile and risky but we've been used to that scene and hoping that we get another unexpected and greater bull run without any failure from any of these big cryptos.
[/quote]
Just like how we know the whole market, it will always be unpredictable. This is the reason why we should be alert in any situation that is happening in crypto world.

[JeffBrad12]

And stable coins are worse in the sense that at least fiat currencies can still survive someway or another as a government is backing them, but if the company behind USDT collapses then the value of the stable coin will go to zero.

We all saw what happened to the TUSD, the damage it did to the crypto space when it depeged from the US dollar, a lot of investors lost their life-saving just in a matter of minutes as a result of that event and coming to USDT, the same thing could happen to USDT no matter the amount of money used in backing it up and the team behind the project, all we pray is for such thing not to occur again in the history of concurrency.

fundamentally different thing while TUSD dynamically backed up by reserve of various commodities and even coins that fluctuates a lot, the other is purely backed up by reserve of money and precious metals if i'm not mistaken.
so I guess same thing won't be happening with TUSD moreover i'm sure that the company behind USDT also knows very well not to make the same mistake like TUSD thats why they are still going strong until this day.
meanwhile TUSD is already vanishing into thin air.
but I think its still good measure to keep diversifying our money when it comes to stablecoin just in case after all no one knows for sure whether this coin could collapse or not.

[Oilacris]

I don't believe a hundred percent in any point in the crypto currency world other than Bitcoin. So I always try to hold most of my funds in Bitcoin. But sometimes something is held in USDT that is temporary. If we see many big alternative coins have fallen in the past few incidents. I hope no such incident happens with USDT, but if it does, it will undoubtedly be a huge disaster in the cryptocurrency world.

We've seen on what happen or the issue on USDC on this year alone.

USDC's Depeg Laid Bare the Risks Traditional Finance Poses to Stablecoins
https://www.coindesk.com/consensus-magazine/2023/04/02/usdcs-depeg-laid-bare-the-risks-traditional-finance-poses-to-stablecoins/

Even with that slightest movement of USDT just in case then for sure tons of people would be losing up their money.
Considering on the current MC $82,911,788,716 the slight movement will cause disaster.

What would happen if it falls down or messed up? People would still trust blindly on other stablecoins that currently existing in the market before USDT.

[Abiky]

We've seen on what happen or the issue on USDC on this year alone.

USDC's Depeg Laid Bare the Risks Traditional Finance Poses to Stablecoins
https://www.coindesk.com/consensus-magazine/2023/04/02/usdcs-depeg-laid-bare-the-risks-traditional-finance-poses-to-stablecoins/

Even with that slightest movement of USDT just in case then for sure tons of people would be losing up their money.
Considering on the current MC $82,911,788,716 the slight movement will cause disaster.

What would happen if it falls down or messed up? People would still trust blindly on other stablecoins that currently existing in the market before USDT.

Each stablecoin comes with its risks. After all, they're not backed by the government. You'd need to trust the issuer of the stablecoin (in this case the private company in control of the stablecoin) to maintain the 1:1 peg with the USD "forever". If the issuing company faces bankruptcy or the bank with the USD reserves collapses, you can say bye-bye to your investment for good. USDT has been lucky to maintain its USD peg for long.

On the other hand, USD Coin lost its peg for a short period of time. To be on the safe side, just cash out directly to Fiat (usually to USD) whenever possible. Who knows how low will the crypto market go after USDT's collapse? Just my thoughts

[woez]

Digital currencies are known to be more volatile than people think usually goes like this If USDT goes down BTC goes up, if BTC goes down USDT goes up Yes. prices for altcoins are soaring but maybe now it could be something else USDT is going up BTC is also going up and the word volatility is for the same reason.