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If tether is pumping BTC then it’ll stop pumping BTC when it’s taken away. Weak hands will fold and then there will be a crash

comboy 6y ago
OK, yes, that's a fair point. But it's not clear to me that pumping being taken away would be a bigger change than people trying to get out of USDT and buying BTC. Also we've been there (mtgox's willy etc). I don't think bitcoin will be much less volatile any time soon. https://www.youtube.com/watch?v=XbZ8zDpX2Mg https://www.youtube.com/watch?v=XbZ8zDpX2Mg
- leppr 6y ago
  People are not buying BTC to get out of USDT, they're buying other stablecoins and tokens pegged to real world assets. The last week has seen a surge in the price of those tokens compared to USDT. I've made good money arbitraging the bouts of panic.
- dragonwriter 6y ago
  > But it's not clear to me that pumping being taken away would be a bigger change than people trying to get out of USDT and buying BTC People trying to get out of USDT into BTC because the USDT:USD parity assumption collapses will boost BTC:USDT prices, but probably not enough to avoid dropping BTC:USD, because it would be less than the USDT:USD drop, is the idea.
- garmaine 6y ago
  How would you sell USDT? You’d buy on a BTC/USDT market. These markets aren’t unified—there are different markets for tether and backed USD. Who would be counterparty to a tether exchange? Thise specific USDT pairings would crash. If they wanted USD (as they presumably do), they’d then crash the other stable coin or backed pairings.
- TomSwirly 6y ago
  Bitcoin has no fundamental/breakup value and no market maker. In the same way that there's no obvious ceiling to its value, if a lot of people try to get out of it at once, there's no obvious floor either.
yeneek 6y ago
Tether market cap is 24bil, Bitcoin market cap is 714bil. Its just 3%. I think that Tether isn't inflating BTC that much. The institutions that buy BTC like PayPal, Square, JPMorgan have much bigger effect on Bitcoin than Tether.
- yeneek 6y ago
  JackFr Fair point. Thank you. Well, it will be an interesting week for sure.
- JackFr 6y ago
  That’s not quite how it’s gonna work. It doesn’t matter what the Tether market cap is. The BTC market cap is coins x price. If Tethers represent 70% of inflow and they disappear, price is gonna come down. Likely a lot more than 3%.
- ur-whale 6y ago
  This is addressed in the article. Basically the market cap of BTC is not relevant here, but rather the daily volume.
- Bellamy 6y ago
  And from the 3% of tether, probably 74% is actually been backed.

comboy 6y ago

OK, yes, that's a fair point. But it's not clear to me that pumping being taken away would be a bigger change than people trying to get out of USDT and buying BTC. Also we've been there (mtgox's willy etc). I don't think bitcoin will be much less volatile any time soon. https://www.youtube.com/watch?v=XbZ8zDpX2Mg https://www.youtube.com/watch?v=XbZ8zDpX2Mg

leppr 6y ago
People are not buying BTC to get out of USDT, they're buying other stablecoins and tokens pegged to real world assets. The last week has seen a surge in the price of those tokens compared to USDT. I've made good money arbitraging the bouts of panic.
dragonwriter 6y ago
> But it's not clear to me that pumping being taken away would be a bigger change than people trying to get out of USDT and buying BTC People trying to get out of USDT into BTC because the USDT:USD parity assumption collapses will boost BTC:USDT prices, but probably not enough to avoid dropping BTC:USD, because it would be less than the USDT:USD drop, is the idea.
garmaine 6y ago
How would you sell USDT? You’d buy on a BTC/USDT market. These markets aren’t unified—there are different markets for tether and backed USD. Who would be counterparty to a tether exchange? Thise specific USDT pairings would crash. If they wanted USD (as they presumably do), they’d then crash the other stable coin or backed pairings.
TomSwirly 6y ago
Bitcoin has no fundamental/breakup value and no market maker. In the same way that there's no obvious ceiling to its value, if a lot of people try to get out of it at once, there's no obvious floor either.

yeneek 6y ago

Tether market cap is 24bil, Bitcoin market cap is 714bil. Its just 3%. I think that Tether isn't inflating BTC that much. The institutions that buy BTC like PayPal, Square, JPMorgan have much bigger effect on Bitcoin than Tether.

yeneek 6y ago
JackFr Fair point. Thank you. Well, it will be an interesting week for sure.
JackFr 6y ago
That’s not quite how it’s gonna work. It doesn’t matter what the Tether market cap is. The BTC market cap is coins x price. If Tethers represent 70% of inflow and they disappear, price is gonna come down. Likely a lot more than 3%.
ur-whale 6y ago
This is addressed in the article. Basically the market cap of BTC is not relevant here, but rather the daily volume.
Bellamy 6y ago
And from the 3% of tether, probably 74% is actually been backed.