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

[BaronDheist]

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.

Stablecoin giant is crypto’s fragile foundation

* The people behind USDT still have not allowed a full audit of their assets.
* Their stacks of (alleged) wealth include "a riskier bundle of assets" than in previous years.

...Its USDT token, which has grown to $184 billion, dominates the global market for dollar-pegged digital currencies.
That durability is surprising. Despite occasional hints of progress, Tether CEO Paolo Ardoino and Chair Giancarlo Devasini still do not publish full audits of the financial assets backing USDT.
...
The overall picture, then, is of a bigger pile of liabilities supported by a slimmer equity buffer and matched with a riskier bundle of assets.
...
In any case, the possible consequences of a Tether meltdown are so severe that the scenario is worth thinking through.

~Source


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

[NotATether]

Much true.

But if that's what they want to do to themselves, then so be it.

There are other stablecoins which are better-ran than USDT, if Tether for some reason decides to throw it all away.

[NeuroticFish]

Tether was in the gray area for incredibly long time. And I think that its current state is not even the worse he had.
Will it fall? Time will tell.

Would such a fall hurt Bitcoin market? Clearly, for 2 reasons:
* the history has shown that any big fall (or hack) in crypto ecosystem tends to also affect bitcoin
* Tether has afaik quite an exposure in bitcoins and their fall may trigger selling rather fast some big amount of bitcoins, hurting the market

But other than that? I don't know, I don't think so. There are plenty of altcoins and stable coins as alternative.
Keep also in mind that USDT is no longer allowed in EU (because of MiCA)

[noorman0]

This is interesting, as there are currently over 200 stablecoins with different tickers, each with varying levels of trust based on their protocol, issuer, and peg. Tether is clearly the current behemoth; if it collapses, who knows how long it will take for other coins to take over or even whether there will be no trust in stablecoins at all. I think Tether is slowly becoming a symbol of public trust in this type of coin.

[Donneski]

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.

[nelson4lov]

This is still fud because there have been hundreds of tether threads centered around their audits. Tether is not a public traded company yet so I would understand why they don't subject themselves to public audits like the big 4 usually do. Tether has been running smoothly for years and they make a fortune from running their stablecoin business, I don't see how it causes irreparable damage to Bitcoin. You guys worry about the wrong things bth.

[PrivacyG]

This is still fud because there have been hundreds of tether threads centered around their audits. Tether is not a public traded company yet so I would understand why they don't subject themselves to public audits like the big 4 usually do. Tether has been running smoothly for years and they make a fortune from running their stablecoin business, I don't see how it causes irreparable damage to Bitcoin. You guys worry about the wrong things bth.

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.

-----

Yes.  It would hurt Bitcoin a lot.  Probably not so much to feel years post an eventual collapse of it any more but a collapse would immediately trigger significant panic and a lot of Money moving around, particularly out of Tether and other Stable Coins for obvious reasons.

The larger Tether becomes, the deeper the hole the entire Market falls in in an eventual collapse.

[BitMaxz]

Am I the only one who thinks differently if Tether collapses? I think it should be a positive effect on Bitcoin and all markets.
Why, look, people who hold USDT will switch to other coins or most likely to Bitcoin.
Before, Bitcoin was the center to trade other altcoins, but right now it's USDT, so if it ends up collapsing, I'm sure it should have a positive impact on crypto and Bitcoin.
So, I don't know how it became a FUDs?

Look at the Bitcoin chart history around November 2017, when the Tether treasury was hacked or breached. The price of Bitcoin pumped high after that issue.
So if it happens this year it should be a positive impact.

[Sandra_hakeem]

so if it ends up collapsing, I'm sure it should have a positive impact on crypto and Bitcoin.

On Bitcoin, not much of the positive impact.

So, I don't know how it became a FUDs?

What do you expect? When a terrible form of journalism is made to feed those cognitive misers with what's supposed to be the market's next line of action, after being fine-tuned for years?? They'll freak out!

Look at the Bitcoin chart history around November 2017, when the Tether treasury was hacked or breached. The price of Bitcoin pumped high after that issue.

It actually had a little impact negatively on Bitcoin, but didn't last long.

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

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

[SeriouslyGiveaway]

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.

Years ago, I used to believe that Tether might collapse but in recent years, Tether changed a lot and their business model and treasury migrated more into the US bonds market. It has made Tether's financial model more solid and perhaps I could be wrong but I think with this good change, Tether control risks better and they have smaller risk of collapse than years ago.

In life, everything can happen so even their business model and treasury have been better, there is still kind of chance of collapse, but in my opinion it is smaller than several years ago.

Generally Tether stablecoins are not good to store your money in, as risk of collapse still exists, and stablecoins won't increase in value so if you want to grow your money bigger with time, you must invest, and the best investment asset in cryptocurrency market is Bitcoin.

[X-ray]

Tether just added $1 billion of bitcoin to their reserves last year. It will be very impactful and there is a high chance that they will be liquidating some of the risky assets if the worse comes to worst.

Currently their bitcoin reserves sitting at 6B, it was 12B before dump. So yeah, it will be impactful. Seeing how deep the liquidity that bitcoin is currently having though, that being said I don't think it will be more impactful than FTX.

Of course, there's much more than just their bitcoin reserves that could impact the entire crypto market.

[GreatArkansas]

Tether USDT got $180 billion of marketcap now. This will indeed affect the entire Bitcoin market once they collapse. But I believe they will not allow this happen. Tether plays a big role in the Bitcoin market, they know what they are already doing, what I am just afraid to happen is same what happened with UST before, but I believe that is already different topic, as they are only same stablecoin.

[WellRozey]

Be calming down.

FTX was shady even before it collapsed.
Tether have been screened rigorously, audited to the core to many times.
FTX was a crypto exchange.
Tether is a stablecoin company, running stable coin is far more easier, they can decide to print at any time too.

Fud is friendly to Tether the most, simply because they have been charged and accused many times but they kept winning isn't it? Enough with the Fud already.

[Don Pedro Dinero]

Tether was in the gray area for incredibly long time. And I think that its current state is not even the worse he had.
Will it fall? Time will tell.

That's what I was thinking. I remember years ago when people were talking about the same thing and the supposed bubble never popped. It would be good if it were audited in the USA, which would put an end to all the speculation, something that seems to be on the way but has not yet happened.

[Zwei]

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

ofc it will be hurt, it will be the biggest blow the crypto market will ever see if that happens.

Tether USDT got $180 billion of marketcap now. This will indeed affect the entire Bitcoin market once they collapse. But I believe they will not allow this happen.

they would be retarded to allow that or do something that will get them there, they are printing money from all the assets they hold and the fees they make.

Tether have been screened rigorously, audited to the core to many times.

are you sure about that?

Tether is a stablecoin company, running stable coin is far more easier, they can decide to print at any time too.

and you don't see what wrong with that?

Fud is friendly to Tether the most, simply because they have been charged and accused many times but they kept winning isn't it? Enough with the Fud already.

not if the "FUD" is about tether. if people no longer trust them, they will want to get rid of their USDT.
if that happens, the market is fucked, but in theory, everything should be fine if every 1 USDT is truly backed by $1, but no one knows that for a fact since tether won't do a public audit.

[ABCbits]

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

If ecosystem means Bitcoin price and people trust towards Bitcoin, then i only somewhat agree with you. You can't use USDT on Bitcoin, while USDT on LN (Taproot Assets) isn't ready to be used yet. All that remains is hoping most people and investor understand that USDT/Tether and Bitcoin are 2 different things, because i've seen people lose trust on cryptocurrency as whole when price coin they hold crashed or big centralized cryptocurrency company is in trouble.

[john_egbert]

Everybody will be screwed once it will happen, imo, but then every eco will cut their share of the pie which USDT had. I still doubt it will happen though.

[Josefjix]

If USDT do collapse, then a sudden drop of Bitcoin will occur, the time it will take to collapse and get back up is the time taken by investors to finding the next stablecoin to stabilize the whole ecosystem.

Remember, crypto ecosystem crashes and rearrange itself thereafter, that's how it's been built from day one.

Nothing actually diminish it totally, it does stumbled and stand back up again, that's how it works.

[Lucius]

If you accept the rules of the game then you must be prepared to bear the consequences - and that means that if the crypto community has accepted so-called stablecoins as something normal and good then it should be prepared to pay the price that any of these stablecoins will one day fail.

I never liked that concept and personally I don't use any stablecoin, because I don't like that we don't actually know if these coins are backed by anything and maybe even worse than that almost all of them have one bad feature that allows them to be frozen regardless of which wallet they are in.

In essence, they are just as bad as fiat, with the difference that they are "printed" by private companies that refuse audits and can declare bankruptcy at any time. I agree that if something like that were to happen, it would have devastating consequences for cryptocurrencies in general.

[Z-tight]

Everybody will be screwed once it will happen, imo, but then every eco will cut their share of the pie which USDT had. I still doubt it will happen though.

Yeah, It is unlikely to happen, but can anybody rule it out completely? Surely not. Usdt is run by a centralized entity, and we can only believe what they tell us. There are probably a lot of usdt coins backed by thin air. The community has been talking about this for a long time, and since the company refuses to be audited, how can we be sure it is not a ticking time bomb.

I don't hope for it to collapse, because of how devastating the effect would be on the entire crypto market, but i do not rule it out. That is why i do not hold any stablecoins in my portfolio, not one.