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Is Tether a Black Swan?
- ggm 5y agoI don't think its a black swan event to the real world, but inside the closed domain of speculation of coins, stable or otherwise, yes, I think it will be. The US traded stocks overall are $50,000,000 million as of march 2021. from this article Tether is of the order $50-100,000 Million. Its a tiny sub-multiple of the overall US economy, and thats just the US economy, If you factor the distribution of tether into world economy (EU, Asia), it only gets smaller. Nobody is going to like taking a haircut on tether, but if you put all your non-risk money on red at a casino, you really were stupid. Tether's claims about risk are not the same as the SEC views of Tether's capital assets, backing, risk. Do the sums on US debt (trillions) for Covid. Now offset that by the implied debt/loss if Tether defaults. It's noise. It's important Noise, But so was Bernie Madoff ($65b fictional, circa $15b actual). or Enron. ($60b) The Soviets nationalised Baku oil. A lot of people lost money, were burning share certificates in the fireplace. Set it against the great depression, it wasn't the black swan event.
- paulpauper 5y agoPeople have been predicting this about tether since 2017 or so
- mikewarot 5y agoIt is my understanding that stablecoins only exist to allow transfer of funds away from the US and into unregulated (by the US) places that offer leveraged transactions on Bitcoin, etc. If the funds flowing into these sites, (which are functionally just casinos) were to even take a temporary hit, quite a few margin calls would be made, and a systemic collapse like 2008 would likely result. How anyone thinks that if Tether went to zero, $28 Billion would transfer out doesn't get it... the $28 Billion wouldn't transfer anywhere, because it was fictional to begin with, it would simply evaporate.