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I've seen many people say this. But the reality is that the significant part of BTCs trading volume is in tether. When that dries up it's price will nose dive a

I've seen many people say this. But the reality is that the significant part of BTCs trading volume is in tether. When that dries up it's price will nose dive and the only route out will be into fiat. And if BTCs price is declining, no one is buying. So tether collapsing means BTC will collapse.

dekz 6y ago
If Tether untethers there will be a rush to other assets, pushing them higher. Shorts denominated in USDT will get absolutely decimated, pushing other assets higher. Exchanges using Tether will enforce a maximum withdrawal, pushing other assets higher. Smart money will buy USDT at a discount once their reserve details are made publicly available. If it's FUD they'll make an absolute killing. There's 3 possibilities here: 1. Tether is completely backed 1:$1 (highly unlikely) 2. Tether is partially backed, the reserves are greater than the outstanding 3. Tether is partially backed, the reserves are less than outstanding Only 3) will have a downward price correction. If they've been buying BTC like everyone here has suggested then 2) is the most probable, since you know BTC is at yet another ATH. If it becomes public that tether has excess reserves, the FUD will disappear silently. Worst case Tether says they will slowly sell off to reach 1:$1 over the next 12 months.
- rtpg 6y ago
  you own a bunch of tether, you decide to "rush" to other assets. Except your existing assets are dropping to 0, so you don't actually have that much buying power anymore. So you'll only see a fraction of a rise. Meanwhile whoever sold you the tether probably cashed out a while back.
  - tehlike 6y ago
    Someone will front run the news and sell tethers for btc, or things like that.
  - lottin 6y ago
    Not to mention that people don't rush to other assets in general, they rush to safe assets. No one is gonna rush to buy bitcoin in the event of turmoil affecting bitcoin exchanges, this is just nonsense.
- ac29 6y ago
  > If Tether untethers there will be a rush to other assets, pushing them higher. On unbanked exchanges this is true. However the next step is that people will transfer those inflated assets to banked exchanges to exchange them for fiat, pushing the price down. See Gox, Mt.
  - ad31mar 6y ago
    Yeah, or simply buy Bitcoin and wait it over.
- chalst 6y ago
  This argument is very flawed, I'll pick on just one point. The main users of Tether are generally people who find it difficult to use conventional finance, so in the event confidence in USDT collapses, a lot of holders will be unable to exit. I don't know why you gave possibility 1, given Tether have admitted it is not completely backed. Since the operation has refused over many years to provide proper accounts, breaking their own promise that they would, you would be foolish to bet on a rosy picture of their finances.
nullc 6y ago
> But the reality is that the significant part of BTCs trading volume is in tether. I believe that is not even remotely true. Most Bitcoin users I know have never touched tether in any form. Rather, what you're seeing is that there are a multitude of casinos operating under the guise of "exchanges" which have absolutely no access to fiat -- usually because they're fly by night shady operations if not outright scams. All these things use tether due to having no fiat access. All of these also pump out enormous amounts of fake "volume" that is ignored by most people with a clue. Checkout the bitwise presentation to the SEC: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2... And their paper on it: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5574233-185408.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...
- xwolfi 6y ago
  Most I know had no choice because our chinese banks blocked withdrawals.

dekz 6y ago

If Tether untethers there will be a rush to other assets, pushing them higher. Shorts denominated in USDT will get absolutely decimated, pushing other assets higher. Exchanges using Tether will enforce a maximum withdrawal, pushing other assets higher. Smart money will buy USDT at a discount once their reserve details are made publicly available. If it's FUD they'll make an absolute killing. There's 3 possibilities here: 1. Tether is completely backed 1:$1 (highly unlikely) 2. Tether is partially backed, the reserves are greater than the outstanding 3. Tether is partially backed, the reserves are less than outstanding Only 3) will have a downward price correction. If they've been buying BTC like everyone here has suggested then 2) is the most probable, since you know BTC is at yet another ATH. If it becomes public that tether has excess reserves, the FUD will disappear silently. Worst case Tether says they will slowly sell off to reach 1:$1 over the next 12 months.

rtpg 6y ago
you own a bunch of tether, you decide to "rush" to other assets. Except your existing assets are dropping to 0, so you don't actually have that much buying power anymore. So you'll only see a fraction of a rise. Meanwhile whoever sold you the tether probably cashed out a while back.
- tehlike 6y ago
  Someone will front run the news and sell tethers for btc, or things like that.
- lottin 6y ago
  Not to mention that people don't rush to other assets in general, they rush to safe assets. No one is gonna rush to buy bitcoin in the event of turmoil affecting bitcoin exchanges, this is just nonsense.
ac29 6y ago
> If Tether untethers there will be a rush to other assets, pushing them higher. On unbanked exchanges this is true. However the next step is that people will transfer those inflated assets to banked exchanges to exchange them for fiat, pushing the price down. See Gox, Mt.
- ad31mar 6y ago
  Yeah, or simply buy Bitcoin and wait it over.
chalst 6y ago
This argument is very flawed, I'll pick on just one point. The main users of Tether are generally people who find it difficult to use conventional finance, so in the event confidence in USDT collapses, a lot of holders will be unable to exit. I don't know why you gave possibility 1, given Tether have admitted it is not completely backed. Since the operation has refused over many years to provide proper accounts, breaking their own promise that they would, you would be foolish to bet on a rosy picture of their finances.

nullc 6y ago

> But the reality is that the significant part of BTCs trading volume is in tether. I believe that is not even remotely true. Most Bitcoin users I know have never touched tether in any form. Rather, what you're seeing is that there are a multitude of casinos operating under the guise of "exchanges" which have absolutely no access to fiat -- usually because they're fly by night shady operations if not outright scams. All these things use tether due to having no fiat access. All of these also pump out enormous amounts of fake "volume" that is ignored by most people with a clue. Checkout the bitwise presentation to the SEC: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2... And their paper on it: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5574233-185408.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...

xwolfi 6y ago
Most I know had no choice because our chinese banks blocked withdrawals.