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People often say that if Tether collapes, it will make Bitcoin crash as well. But why? If people want to sell their Tether for $1 and do not get it - why woul
by TekMol 6y ago
People often say that if Tether collapes, it will make Bitcoin crash as well.
But why?
If people want to sell their Tether for $1 and do not get it - why would that lower the price of Bitcoin?
- space_rock 6y agoTether funds the buy orders and bids. Without them the market price falls
- TekMol 6y agoHow so? The Bitcoin/USD exchange ratio is from orders that trade Bitcoin for USD. How does Tether have an impact on this?
- space_rock 6y agoTether is a USD token used by many exchanges and accounts for much of the volume
- LMYahooTFY 6y agoCitation is definitely needed here.
- anonymoushn 6y agoFor example Binance and gate.io USD pairs are actually USDT pairs.
- space_rock 6y agoWell you could Google it. The amount of tether in circulation is within the billions. Thought it was common knowledge
- space_rock 6y agoFor people not aware of Bitcoin trading $136,273,340,188.23 Tether 24hr volume Volume on Chinese exchanges is unreliable But the trading volume is obviously significant $33,139,949,239.15 in tether tokens https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- TekMol 6y agoSo you claim that Tether Limited is not buying Dollars when they issue Tether but rather Bitcoin? Why would they do it?
- rkagerer 6y agoThey also make up a portion of the sell orders and asks. Anyone know the proportion of buy vs. sell pressure accountable to it and how that's trended over the last few weeks/years?
- imhoguy 6y agoMaybe USDT keeps reserves in BTC. But anyway, in panic moment on crypto markets the real USD will be in demand. Some exchanges may not survive the run as there is not enough money there to pay everyone even $1k for BTC. Exchanges collapsing will take a lot of BTC with them (see history).
- BLKNSLVR 6y agoBecause Tether has been "minting" more Tether coins (recently added 2B in one week[0]) which they then use to buy Bitcoin, which in turn pumps the valuation of Bitcoin. If the backing of Tether is questionable, then they're just creating new money out of thin air, and so Bitcoin's market cap is artificially high - having been effectively purchased with monopoly money. I recently read an interesting article about the sketchy unregulated banks that Bitfinex / Tether are associated with. I'll try to find the link.[1] [0]: https://www.coindesk.com/tether-mints-record-2b-usdt-in-one-week https://www.coindesk.com/tether-mints-record-2b-usdt-in-one-... [1]: https://www.coindesk.com/think-stablecoins-are-solid-remember-the-financial-crisis https://www.coindesk.com/think-stablecoins-are-solid-remembe...