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The bear case is that markets realize Tether is backed only hot air and head for the exits. Tether "breaks the buck" (price goes under $1.00), and on USDT exch
by howlgarnish 6y ago
The bear case is that markets realize Tether is backed only hot air and head for the exits. Tether "breaks the buck" (price goes under $1.00), and on USDT exchanges there's a spike in all other cryptos as people buy anything and everything to get rid of it. On exchanges with actual fiat, people get spooked and start selling crypto for fiat, spooking more people into selling and triggering a market crash.
This, incidentally, is pretty much what happened when Mt Gox disclosed that they were backed by hot air because they had most of their reserves stolen.
- dustingetz 6y agoBut everyone "in" on crypto wants Tether to hold, so it will, which is why that scam even works at all. A run on Tether is not going to happen, everyone already knows there's nothing there and yet it holds
- octoberfranklin 6y agoThat's what people say right before ponzis collapse.
- bsanr2 6y agoIs it comparable to a Ponzi scheme? It doesn't seem like Bitcoin relies on a constant influx of cash, simply the belief that any given holder desiring to exchange for USD will get x amount for it.
- ur-whale 6y ago>This, incidentally, is pretty much what happened when Mt Gox ... Indeed. Let's hope the same story won't repeat when Paypal is found to hold fractional reserves of their BTC-denominated liabilities.
- DennisP 6y agoMt. Gox was handling 70% of Bitcoin trade volume at the time. Of course the price crashed, when everyone on Mt. Gox tried to sell their mostly-stolen Bitcoins while they could. I don't know how a Tether crash would play out but it's an entirely different situation.