The Bitcoin Ecosystem will be hurt much more by Tether's collapse than FTX.

[Cryptomultiplier]

What you are insinuating is but hypothetical thoughts, because we would have to compare history data and we know that both Tether and FTX have different market structures and fulfill different goals in the market.
It's just pure speculation I can say, but I think for one that because Tether has been integrated into the global financial system, its failure would be massive and more disruptive than a scenario of FTX bankruptcy or collapse.

[dansus021]

 The Bitcoin Ecosystem will be hurt much more by Tether's collapse than FTX.

Yes and super duper yes Tether now is at the stage too big too fail in my opinion and if they fail the bitcoin pretty much gonna down like a lot, Just curious gimme a coin/token that doesnt have USDT pair? The answer would be there are no token. Even memecoin from the pump fun with pair SOL that eventually have pair with USDT.

According to coingecko Tether now had 183.7 Billion of marketcap that freaking big. I would say that Tether is the "Oil" in the Engine. Bitcoin alone Over 70% of all BTC trading volume is in USDT. If USDT depegged for atleast on hour the Total Liquidity Freeze across all chains.

[OcTradism]

The Bitcoin Ecosystem will be hurt much more by Tether's collapse than FTX.

Yes and super duper yes Tether now is at the stage too big too fail in my opinion and if they fail the bitcoin pretty much gonna down like a lot, Just curious gimme a coin/token that doesnt have USDT pair? The answer would be there are no token. Even memecoin from the pump fun with pair SOL that eventually have pair with USDT.

According to coingecko Tether now had 183.7 Billion of marketcap that freaking big. I would say that Tether is the "Oil" in the Engine. Bitcoin alone Over 70% of all BTC trading volume is in USDT. If USDT depegged for atleast on hour the Total Liquidity Freeze across all chains.

It is bigger surely if it happens.

FTX is like a link or ring in cryptocurrency ecosystem but Tether is more like a chain. A ring can be broken, unfixable, unusable but it can be replaced by another ring and the chain will recover its functions like how cryptocurrency market and ecosystem recovered and grew more after FTX collapse and some consequent bankruptcies later. However Tether is much bigger than FTX exchange, and Tether is a biggest stablecoin company so if it has financial problems, collapse, bankruptcy, many cryptocurrency companies from exchanges to other services will be affected very severely.

About depegs of stablecoins, people who are curious can read this report.
Stable coins: a deep dive into valuation and depegging.

[john_egbert]

What you are insinuating is but hypothetical thoughts, because we would have to compare history data and we know that both Tether and FTX have different market structures and fulfill different goals in the market.
It's just pure speculation I can say, but I think for one that because Tether has been integrated into the global financial system, its failure would be massive and more disruptive than a scenario of FTX bankruptcy or collapse.

Much more stands on Tether than it did on FTX, so I agree. Tether is a pillar which many use in daily operations, FTX.. not to the same extent.

[lionheart78]

Tether collapse will certainly affect Bitcoin trading, since it was the largest stablecoin to be used as Bitcoin pair, the collapse of Tether will have a temporary negative effect to Bitcoin but eventually, the market will adjust.  It will be a temporary problem with Bitcoin liquidity but it will get fixed once another stablecoins take the place of Tether in the exchange market.

Bitcoin is a separate network; the only thing that connects the two is the exchange.  Reputation-wise, any Crypto as a whole will be affected by the collapse of Tether, it may discourage people from investing in cryptocurrency, Bitcoin included, but eventually, just like any other mishaps in crypto, it will be forgotten and the market goes on and recovers.

[buwaytress]

True, maybe even temporary catastrophic, but Bitcoin won't be headed down the drain because of that. Tether's dominance is already challenged anyway, and all its rivals (itself included) has bitcoin as (partial) reserves. Bitcoin people should expect such pitfalls, such lessons in centralised and opaque structures to be learnt.

[ZAINmalik75]

USDT has been debated so many times, and their had been many cases against it too. Many times, I have thought it is going to be the major reason for the next black swan event, like the one we experienced on 10 10 2025 and the FTX one. All these black swan events will always have an impact on the bitcoin and you are absolutely right to relate btc with USDT fall.

The current market cap of the USDT is around $184B, and if it collapses the collapse will be bigger than the FTX, it was just an exchange which mostly effected the exchange users but here, the USDT is being used by many like mostly it is the one used even if it is baned by MICA or some other countries but it is still the first choice of many I still use it for p2p purposes because people here only deal or give better deal in USDT. Although there is USDC and other stable coins but majority has been using USDT for a long time.

So there are two things, now, either they have a solid proof of funds that even without audits they are surviving, or the second is this is a bomb and no one wants to pull the pin.

[Faisal2202]

Total market cap of stablecoins is around $300 billions, and usdt market cap is around $180B, now imagine what could happen if it goes away. The liquidity will fade and we won't have funds to do anything because there will be nothing. $180B is not a small amount. This is a huge atomic bomb if it bursts. Bitcoin will suffer a lot, the radioactive elements of this blast will hurt Bitcoin for the rest of its life, or maybe for at least the next few decades haha.

Because we are not forgetting about FTX or are not ready to, then USDT is even going to make us remember it for the rest of our lives.

Well, you are right that this is concerning for bitcoin too, any event that has a direct impact on the market, and if that market is led by bitcoin, that means it has an impact on bitcoin too. I don't think we should worry about it or stress over it that much. By the way, analyst has also predicted that by 2030, the market cap for the stablecoins is going to be in trillions! Have you heard? Imagine if USDT blasts in those times.

Back in 2021, hearing about someone losing or gaining millions in crypto was shocking to us. But over time, we got used to it. Then billion dollar moves started happening, and again at first it felt unreal, but eventually that became normal too. Now we are starting to hear about trillions, and it feels large and hard to believe, but if the pattern continues, a few years from now, that will feel completely normal as well.
The numbers keep getting bigger, and we keep adjusting to them

[BlackBoss_]

If I had a Stable Coin business, it would actually be in the interest of every body including myself that I do the full Audit like people are asking to see.  It would sort out this long lasting issue, it would make more people Trust the Tether Stable Coin and it would not have any disadvantage on any sides either, besides the cost.

I do not see a reason they should NOT do an Audit.  It looks very sketchy for a reason.

Tether actually has done many audits so far, and it's good to see Tether and centralized exchanges changed their policies, became more transparency with their company treasuries. These changes did not come by any coincidence or randomness but they were forced to change after two big collapses of Terra and FTX exchange in the previous market cycle and its bear market.

The challenge with people like us is whether we can trust audits?
Trust or not, it's personal belief that can be based by evidence from audits reports too, but it's our money, and we should never trust any company like Tether or any audits company for safety of our fund.

Collapses, bankruptcies of Enron in 2000s, and Terra & FTX several years are are reminders.

[fikrett]

If I had a Stable Coin business, it would actually be in the interest of every body including myself that I do the full Audit like people are asking to see.  It would sort out this long lasting issue, it would make more people Trust the Tether Stable Coin and it would not have any disadvantage on any sides either, besides the cost.

I do not see a reason they should NOT do an Audit.  It looks very sketchy for a reason.

Tether actually has done many audits so far, and it's good to see Tether and centralized exchanges changed their policies, became more transparency with their company treasuries. These changes did not come by any coincidence or randomness but they were forced to change after two big collapses of Terra and FTX exchange in the previous market cycle and its bear market.

The challenge with people like us is whether we can trust audits?
Trust or not, it's personal belief that can be based by evidence from audits reports too, but it's our money, and we should never trust any company like Tether or any audits company for safety of our fund.

Collapses, bankruptcies of Enron in 2000s, and Terra & FTX several years are are reminders.

Trust, but verify. Always.

I agree. Better not to tie your funds to any company like that.

 

[macson]

We all agree that a Tether collapse would significantly impact Bitcoin because it's one of the most widely used stablecoins in crypto, and its collapse would have a significant impact --- just like any major event in crypto. I think the collapse would likely be one of the most devastating crashes in history.

But that's something we can't predict when it will happen. We can only hope that something bad like this won't happen, even though no one can guarantee it won't.

[PrivacyG]

Have they provided any other reason aside from not wanting to get audited by a public facility?

Any reason is enough.  The community should have been stricter.  After all, Tether came to the Cryptocurrency community.  And when a company decides to lack transparency in the Cryptocurrency industry, it should end right there for them.  Other wise, the community and the industry is prone to gigantic failures.  See Cryptocurrency Exchanges using Know Your Customer to steal funds of their customers in the snap of a finger.  See Terra.  See all the other failures, it is like a plague.

-----

Tether actually has done many audits so far, and it's good to see Tether and centralized exchanges changed their policies, became more transparency with their company treasuries. These changes did not come by any coincidence or randomness but they were forced to change after two big collapses of Terra and FTX exchange in the previous market cycle and its bear market.

They became 'more' transparent?  They should have been totally transparent from the start.  These Stable Coins work strictly on Trust and nothing more.  They rely on how foolish we are to believe their words.  If the community followed the 'verify' rule, they would not even look at Tether at all.  But then again, most of the Cryptocurrency users are looking particularly to make Money and no other thing interests them.  Which affects all of us.

They changed their policies after being 'forced to change'.  This says everything.

Also.  It does not help their case that they changed their policies at all.  It used to be a 'conspiracy' that they may freeze Tether at their liking until it became the norm.  Great, they are Auditing their reserve.  Pick your pill, Audited but they may freeze yours or Unaudited but no Tether has ever been frozen?

[BlackBoss_]

They became 'more' transparent?  They should have been totally transparent from the start.  These Stable Coins work strictly on Trust and nothing more.  They rely on how foolish we are to believe their words.  If the community followed the 'verify' rule, they would not even look at Tether at all.  But then again, most of the Cryptocurrency users are looking particularly to make Money and no other thing interests them.  Which affects all of us.

I don't defend Tether here and from your reply, it seems you misunderstood me. I only said that the collapses of Terra and FTX as well as pressure from community in cryptocurrency industry and perhaps regulators were big enough, so that Tether had to change themselves. I don't say their stablecoins are safe now but at least something was improved and looked more transparent, something better.

Be clear, I don't have any plan to store my money in stablecoins, just store it in either bitcoin or cash.

Pick your pill, Audited but they may freeze yours or Unaudited but no Tether has ever been frozen?

I knew that risk.
Stablecoin Blacklists: How they work and who controls them.
PSA: Most Stablecoins can be frozen, even in your own wallets.
Stablecoins and blacklists.

[Darker45]

Of course, of course. Tether is way way bigger and more significant than FTX. If FTX's collapse had a massive impact on the Bitcoin market, Tether's collapse would create a much bigger impact.

Terra was far less significant in the crypto ecosystem, too, but its collapse also triggered a severe winter across the entire crypto market where hundreds of billions were wiped out.

Imagine if it were Tether that collapsed--the third largest in terms of market cap, the largest in volume in terms of trading. Bitcoin would fall. But, as always, it's temporary. And if you're focused on the silver lining, it's a great great sale.

[JeffBrad12]

Will it though? Tether is stablecoin deployed in every blockchain except bitcoin. Ethereum is the prime victim if tether happen to collapse because locked TVL of tether in there is massive.

Bitcoin on the other hand got nothing to do with tether, maybe getting some dirt because people like to associate thing such as saying crypto collapse nonsense just because a company is going down but overall the ecosystem of bitcoin is pretty much separated from Tether.
If anything, the price might got affected but bitcoin's ecosystem? I beg to differ.

[Somegory]

Will it though? Tether is stablecoin deployed in every blockchain except bitcoin. Ethereum is the prime victim if tether happen to collapse because locked TVL of tether in there is massive.

Bitcoin on the other hand got nothing to do with tether, maybe getting some dirt because people like to associate thing such as saying crypto collapse nonsense just because a company is going down but overall the ecosystem of bitcoin is pretty much separated from Tether.
If anything, the price might got affected but bitcoin's ecosystem? I beg to differ.

I agree, it will affect Ethereum and the likes of Solana more than Bitcoin, in fact every coins that has TVL locked up on DeFi platforms will all crumbled, not a single DeFi will be left out, USDT have become very big and nothing issues too big to collapse in this space.

I hope all these stays a FUD as always, because since the past years many people have always want to see Tether crumbled, it's like they believe that USDT reset will create the biggest buying opportunity for investors than anything else.

The more people want this to happen the more I believe that it will never happen, this is how crypto space have been for the past how many years now.

[davis196]

The Bitcoin Ecosystem will be hurt much more by Tether's collapse than FTX.

Note: This is not "FUD", sometimes reality matters, especially for people who pay attention.
Q) Is Tether uncertainty a Bitcoin topic?
A) In a worst-case event it will be one of the biggest topics in all of Bitcoin history.

Replace the word "ecosystem" with the word "price" and you will be right. The FTX collapse didn't hurt the Bitcoin ecosystem. It caused FUD on the crypto markets and a BTC price drop, which was temporary and the BTC price recovered after several months and started a bull run.
The Bitcoin ecosystem(the BTC blockchain and protocol) has nothing to do with Tether. Tether transactions are handled on different blockchains. If Tether collapses, the Bitcoin price would most likely go down to levels below 20K or even 10K, but the Bitcoin blockchain would be fine. Tether is the biggest USD stablecoins, but it's not the one and only USD stablecoin. If Tether ever collapses, USDC will take the lead and it will replace Tether completely.

[dezoel]

Way worse, it would be like FTX and Luna combined, USDT is 100+ billion already, nearing 200 billion, last I checked it was like 180 billion or something. Suddenly taking that much money from the people would suddenly end up being a lot worse for people.

I would guess that the best thing that we can do at this point would be making sure that we are dealing with something that will take a long time. I think it's clear that we are going to see USDT crash being a very long winter for crypto without a doubt.

[Hamza2424]

OP, I don’t think this is FUD, it’s a fair question.

FTX was a big collapse but it was still just one company. Tether is more like part of the market’s plumbing. If USDT failed, the immediate shock could be worse simply because of how many trading pairs depend on it. Liquidity would dry up fast and panic would spread quickly.

That said, Bitcoin itself doesn’t depend on Tether to function. The price would suffer no doubt but the protocol wouldn’t care. We’ve seen this market survive worse than people thought possible.

Yep, protocol will not be affected. Only the price will be affected. Investor could make huge unrealized loss but they can bear it I am sure. Holder should not sell in huge loss, they must wait and mostly do wait bro. But still USDT has a huge market cap and if it vanishes, it can leave a huge gap of demand for the other stable coins to recover.

Which they might not be able to recover but with time they can but in that time bro we will be seeing the worst nightmare of our lives in crypto haha.

[PrivacyG]

I don't defend Tether here and from your reply, it seems you misunderstood me. I only said that the collapses of Terra and FTX as well as pressure from community in cryptocurrency industry and perhaps regulators were big enough, so that Tether had to change themselves. I don't say their stablecoins are safe now but at least something was improved and looked more transparent, something better.

I did not mean to contradict you personally, I am only saying that Tether has no place in my opinion around the Cryptocurrency industry even if they became better than what they were in time.  Here, all of us should work a lot more on splitting them in two strict categories.  The worthy and the ones to completely ignore.  A leg in our boat, a leg in theirs.. it sounds like something to ignore!