3 ms·

For sure. I don't hold or trust Tether. But, the existential risk to the (crypto) economy at large seems pretty small, in my opinion. The unregulated, debased

For sure. I don't hold or trust Tether. But, the existential risk to the (crypto) economy at large seems pretty small, in my opinion. The unregulated, debased Tether seems less risky than holding regulated, backed-by-real-property mortgage-backed securities in 2007. It seems much a-do about not much, to me. But, I guess people need something to worry about.

albntomat0 5y ago
Maybe? I don't think it'd be existential threat, but could be a massive shock/crash, in my opinion. I'll guess we'll have to wait and see!
ethbr0 5y ago
I think this might be a misreading of 2007/8. Bad mortgage backed securities were the root risk. The unregulated leverage piled on top of those MBSs (credit default swaps) ballooned the consequences of that risk. But what really caused the global meltdown was (1) pervasiveness of exposure & (2) consequently, institutional uncertainty and withdrawal of liquidity. When the MBSs failed, the CDSs multiplied the dollar impact. Which would have been that, except that these assets underpined large portions of institution's balance sheets. And critically, unknown large portions. The "music stopping" was the breaking of institutional trust in the solvency of their counterparties, and hence evaporation of liquidity. The sheer opaqueness of the crypto exchanges might actually be an advantage here, as unlike traditional exchanges and the banking system, they're not used to keeping an eye on their counterparties' balances.
michaelt 5y ago
> But, the existential risk to the (crypto) economy at large seems pretty small I believe the fear is: 1. The price of BTC is high because a lot of people are buying it. 2. A lot of those people buying it are paying with Tether's funny money which there is somehow $60 billion of. 3. If that $60 billion ceased to exist, the price of BTC would fall. 4. $60 billion is a lot of money, so the price of BTC would fall a lot.

albntomat0 5y ago

Maybe? I don't think it'd be existential threat, but could be a massive shock/crash, in my opinion. I'll guess we'll have to wait and see!

ethbr0 5y ago

I think this might be a misreading of 2007/8. Bad mortgage backed securities were the root risk. The unregulated leverage piled on top of those MBSs (credit default swaps) ballooned the consequences of that risk. But what really caused the global meltdown was (1) pervasiveness of exposure & (2) consequently, institutional uncertainty and withdrawal of liquidity. When the MBSs failed, the CDSs multiplied the dollar impact. Which would have been that, except that these assets underpined large portions of institution's balance sheets. And critically, unknown large portions. The "music stopping" was the breaking of institutional trust in the solvency of their counterparties, and hence evaporation of liquidity. The sheer opaqueness of the crypto exchanges might actually be an advantage here, as unlike traditional exchanges and the banking system, they're not used to keeping an eye on their counterparties' balances.

michaelt 5y ago

> But, the existential risk to the (crypto) economy at large seems pretty small I believe the fear is: 1. The price of BTC is high because a lot of people are buying it. 2. A lot of those people buying it are paying with Tether's funny money which there is somehow $60 billion of. 3. If that $60 billion ceased to exist, the price of BTC would fall. 4. $60 billion is a lot of money, so the price of BTC would fall a lot.