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The question is what happens when 50% of volume disappears. Tether currently has about as much volume as the other 9 of the top 10 cryptocurrencies have combine

by ac29 6y ago

The question is what happens when 50% of volume disappears. Tether currently has about as much volume as the other 9 of the top 10 cryptocurrencies have combined, and is the top trading pair for BTC, ETH and many others. You dont have to hold any to be exposed to a huge downside risk.

gruez 6y ago
>The question is what happens when 50% of volume disappears. Surely this isn't an issue because the volume will just move the other exchanges? The bigger threat is investors getting cold feet and not wanting to buy at all.
- ac29 6y ago
  Tether is not an exchange. It is a centralized cryptocurrency where the centralized authority has the ability to freeze assets (they did this recently after a DeFi hack). While I dont necessarily think it will happen, theres no reason the US government or some other authority cant seize and suspend operation of Tether's blockchain. At that point zero Tether transactions can occur, on any exchange, any DeFi contract, or any number of other associated activities.
- arcticbull 6y ago
  What happens is at un-banked exchanges, people try and run for the hills, buying as much BTC or ETH as they can get their hands on with their vanishingly worthless USDT. The price of crypto on these exchanges goes up parabolically into the millions. These folks then transfer their crypto to banked exchanges to try and salvage what little they can - to try and pay back some of the stupid loans they've been taking on the run-up, and they flood these banked exchanges with sell orders, and the price there crashes to pennies. Some exchanges may go insolvent, and those could be on the CME BRR calculation list, causing the price there to spike, leading to cascading liquidations in the futures market. The worst case scenario where the wheels come off is that the wheels come all the way off, like a MtGOX on steroids.
  - lukebuehler 6y ago
    Yes, so much this. Everyone keeps simply saying that the BTC price will blow up because everyone sells Tether. Yes and no! What will really happen is that the BTC spot price will diverge between those exchanges that denominate in USDT and those that do in USD. Therefore, the best indicator to see if Teether is failing is to track the difference in the rate between exchanges.
    - cdiddy2 6y ago
      Yup, last time Tether traded as a significant discount(Oct 15 2018) BTC price on bitfinex went up $1500 and on coinbase it went up $700. This was in the depths of the bear market with price around $6200 too.
- nwah1 6y ago
  The volume is fake, which is the point. They want you to believe they are equivalent to dollars, and this fake money comprises the majority of purchase orders for all coins. If the spot price of the fake money falls to an accurate price (nothing), then it will tank everything it has touched.

by ac29 6y ago

gruez 6y ago

>The question is what happens when 50% of volume disappears. Surely this isn't an issue because the volume will just move the other exchanges? The bigger threat is investors getting cold feet and not wanting to buy at all.

ac29 6y ago
Tether is not an exchange. It is a centralized cryptocurrency where the centralized authority has the ability to freeze assets (they did this recently after a DeFi hack). While I dont necessarily think it will happen, theres no reason the US government or some other authority cant seize and suspend operation of Tether's blockchain. At that point zero Tether transactions can occur, on any exchange, any DeFi contract, or any number of other associated activities.
arcticbull 6y ago
What happens is at un-banked exchanges, people try and run for the hills, buying as much BTC or ETH as they can get their hands on with their vanishingly worthless USDT. The price of crypto on these exchanges goes up parabolically into the millions. These folks then transfer their crypto to banked exchanges to try and salvage what little they can - to try and pay back some of the stupid loans they've been taking on the run-up, and they flood these banked exchanges with sell orders, and the price there crashes to pennies. Some exchanges may go insolvent, and those could be on the CME BRR calculation list, causing the price there to spike, leading to cascading liquidations in the futures market. The worst case scenario where the wheels come off is that the wheels come all the way off, like a MtGOX on steroids.
- lukebuehler 6y ago
  Yes, so much this. Everyone keeps simply saying that the BTC price will blow up because everyone sells Tether. Yes and no! What will really happen is that the BTC spot price will diverge between those exchanges that denominate in USDT and those that do in USD. Therefore, the best indicator to see if Teether is failing is to track the difference in the rate between exchanges.
  - cdiddy2 6y ago
    Yup, last time Tether traded as a significant discount(Oct 15 2018) BTC price on bitfinex went up $1500 and on coinbase it went up $700. This was in the depths of the bear market with price around $6200 too.
nwah1 6y ago
The volume is fake, which is the point. They want you to believe they are equivalent to dollars, and this fake money comprises the majority of purchase orders for all coins. If the spot price of the fake money falls to an accurate price (nothing), then it will tank everything it has touched.