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Re your first claim it just takes time. Re your second claim, that’s a common misconception. The price of bitcoin would skyrocket against USDT but pancake agai

Re your first claim it just takes time. Re your second claim, that’s a common misconception. The price of bitcoin would skyrocket against USDT but pancake against USD. Who in their right mind would sell their (actually worth USD) Bitcoin for your worthless Bahamian IOUs? Absolutely nobody. So you’ll see a massive skyrocket against USDT and as soon as people realize what’s going on, it’ll go no-bid. RIP. Then the ensuing panic will cause selling on USD markets, arb bots will turn off, and that selling will be accelerated by the few who got BTC from their USDT piles as they run for the exit. Then exchanges will go down for “maintenance.” You don’t need to believe me, this happens with every exchange insolvency. It happened at Gox and it happened at Quadriga.

impostervt 5y ago
I hope you're right. I think the major tipping point would be a major exchange deciding to no longer accept it.
- bobthepanda 5y ago
  you would need some news that makes USDT simultaneously radioactive to everyone holding it at the same time. runs fundamentally all work the same way, whether its Greek bonds, deposits in a bank, etc.
  - arcticbull 5y ago
    What I don't think most folks realize is that USDT is heavily centralized. They have an extensive 'blacklist' of tokens they've frozen, and they add to it regularly. Far more so, I believe, than any of the other stablecoins. They were the first (only?) to freeze tokens coming out of the Poly hack. [1] I believe they even forced a change to Omni to support blacklisting after they were 'hacked' [2] a few years ago (scare quotes because it was never investigated or IMO resolved). [3] It's highly antithetical to the Satoshi white paper. If Tether gets shut down and their leadership banged up, I strongly suspect custody of the network will fall with the DoJ and they could, at their discretion, freeze all tokens pending full AML/KYC and source-of-funds of holders. Whether this is a credible fear or not, the ensuing fear and chaos would almost certainly break the $1 peg, especially once their exchange friends stop supporting the peg and turn states witness. [1] https://www.coindesk.com/tech/2021/08/11/returned-funds-blacklisted-tokens-raise-more-questions-than-answers-in-defis-biggest-hack/ https://www.coindesk.com/tech/2021/08/11/returned-funds-blac... [2] https://www.coindesk.com/markets/2017/11/21/tether-claims-30-million-in-us-dollar-token-stolen/ https://www.coindesk.com/markets/2017/11/21/tether-claims-30... [3] https://github.com/OmniLayer/omnicore/releases/tag/v0.3.0 https://github.com/OmniLayer/omnicore/releases/tag/v0.3.0
jkhdigital 5y ago
You bring up a very important but often overlooked point about market panics: the problem is not really everyone rushing for the door, it is market makers pulling bid liquidity so that “normal” selling volumes tank the price (which triggers the avalanche).
- qeternity 5y ago
  What? Who told you this? Market makers, especially in crypto, do not have long holding periods. The big moves in crypto are because of coordinated manipulation to trigger stops and liquidations (forced, price insensitive buying and selling). I don’t know if this is /r/wsb leaking but markets do not tank because market makers pull back…that’s just not the business they are in.
  - m3kw9 5y ago
    Yeah they delta hedge anyways so no need to pull back
    - qeternity 5y ago
      On options, yes. But in delta 1 products is not always so easy. They are often legitimately just market making.
  - quickthrowman 5y ago
    If tether crashed I guarantee every MM would pull their bid, nobody wants to be left holding the bag. I don’t care if they’re obligated by contract to provide a bid/ask at all times—if USDT went bust, BTC/USDT liquidity would evaporate very quickly. The contract would be irrelevant since the exchange would die. Either that, or their bid will be 0, like on 0DTE options that are far out of the money.
    - qeternity 5y ago
      Yes, I agree. But if all MMs withdrew but you had lots of other stickier liquidity, spreads might widen but it would cause a crash. Of course if Tether implodes, all the long term buyers will evaporate, which is my point: medium/long term price is dictate by swing and positional traders, not market makers. > Either that, or their bid will be 0, like on 0DTE options that are far out of the money. What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Source: career hedge fund options trader
trident5000 5y ago
I think it would increase as tether would need to dump into btc on exchanges like bitfinex and most know this dynamic by now. But who even cares. If it craters like it did during covid from fear selling it just comes back in a month or so.
- arcticbull 5y ago
  It only came back because of USDT. This is true according to the chat transcripts in the NYAG filings between Bitfinex’ Merlin and the money launderers they parked money with.
  - trident5000 5y ago
    Surely you can provide a source for that (where exactly this was said)? As far as I have seen they dont show anything demonstrating this. And this tin foil hat theory about tether pumping btc has been debunked repeatedly.
    - arcticbull 5y ago
      It was in the NYAG settlement. [1] Transcripts here. [2] Merlin is Bitfinex/Tether CFO Giancarlo Devasini. [3] Oz and CCC is Oz Yosef - their contact at the Panamanian money launderer Crypto Capital Corp. Here, they parked almost $1B of co-mingled funds without a contract at all and had it seized by various world authorities. Merlin [15.10.18 10:01] I need to provide customers with precise answer at this point, can't just kick the can a little more Merlin [15.10.18 10:02] the international I mean CCC [15.10.18 10:02] I will keep you posted here CCC [15.10.18 10:02] On the process of all international payments. Merlin [15.10.18 10:02] please understand all this could be extremely dangerous for everybody, the entire crypto community Merlin [15.10.18 10:03] BTC could tank to below 1k if we don't act quickly For once, I believe Giancarlo. I recommend reading the rest of the transcripts in [2]. > And this tin foil hat theory about tether pumping btc has been debunked repeatedly. I mean, you can keep repeating that, but of course, it hasn't. I don't know there's conclusive evidence at this point although a massive class action suit against Tether for market manipulation was recently allowed to proceed by a judge after rejecting Tether's request for summary judgement. 5 of the 10 claims were dismissed - a few on technicalities - but 5 claims were approved to continue on the basis of suitably compelling evidence and off to court we go. [4] >> The court did dismiss RICO charges against the defendants. However, it found the plaintiffs adequately alleged monopolization, market manipulation, common law fraud, and violation of the Commodities Exchange Act. [4] I'll let the judge decide if it's FUD thanks :) [1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... [2] https://cryptonews.com/news/how-merlin-lost-patience-trying-to-save-bitfinex-s-usd-851-m-3760.htm https://cryptonews.com/news/how-merlin-lost-patience-trying-... [3] https://www.ft.com/content/4da3060c-8e1a-439f-a1d7-a6a4688ad6ca https://www.ft.com/content/4da3060c-8e1a-439f-a1d7-a6a4688ad... [4] https://protos.com/tether-market-manipulation-class-action-lawsuit-crypto-trader-new-york-court/ https://protos.com/tether-market-manipulation-class-action-l...

impostervt 5y ago

I hope you're right. I think the major tipping point would be a major exchange deciding to no longer accept it.

bobthepanda 5y ago
you would need some news that makes USDT simultaneously radioactive to everyone holding it at the same time. runs fundamentally all work the same way, whether its Greek bonds, deposits in a bank, etc.
- arcticbull 5y ago
  What I don't think most folks realize is that USDT is heavily centralized. They have an extensive 'blacklist' of tokens they've frozen, and they add to it regularly. Far more so, I believe, than any of the other stablecoins. They were the first (only?) to freeze tokens coming out of the Poly hack. [1] I believe they even forced a change to Omni to support blacklisting after they were 'hacked' [2] a few years ago (scare quotes because it was never investigated or IMO resolved). [3] It's highly antithetical to the Satoshi white paper. If Tether gets shut down and their leadership banged up, I strongly suspect custody of the network will fall with the DoJ and they could, at their discretion, freeze all tokens pending full AML/KYC and source-of-funds of holders. Whether this is a credible fear or not, the ensuing fear and chaos would almost certainly break the $1 peg, especially once their exchange friends stop supporting the peg and turn states witness. [1] https://www.coindesk.com/tech/2021/08/11/returned-funds-blacklisted-tokens-raise-more-questions-than-answers-in-defis-biggest-hack/ https://www.coindesk.com/tech/2021/08/11/returned-funds-blac... [2] https://www.coindesk.com/markets/2017/11/21/tether-claims-30-million-in-us-dollar-token-stolen/ https://www.coindesk.com/markets/2017/11/21/tether-claims-30... [3] https://github.com/OmniLayer/omnicore/releases/tag/v0.3.0 https://github.com/OmniLayer/omnicore/releases/tag/v0.3.0

jkhdigital 5y ago

You bring up a very important but often overlooked point about market panics: the problem is not really everyone rushing for the door, it is market makers pulling bid liquidity so that “normal” selling volumes tank the price (which triggers the avalanche).

qeternity 5y ago
What? Who told you this? Market makers, especially in crypto, do not have long holding periods. The big moves in crypto are because of coordinated manipulation to trigger stops and liquidations (forced, price insensitive buying and selling). I don’t know if this is /r/wsb leaking but markets do not tank because market makers pull back…that’s just not the business they are in.
- m3kw9 5y ago
  Yeah they delta hedge anyways so no need to pull back
  - qeternity 5y ago
    On options, yes. But in delta 1 products is not always so easy. They are often legitimately just market making.
- quickthrowman 5y ago
  If tether crashed I guarantee every MM would pull their bid, nobody wants to be left holding the bag. I don’t care if they’re obligated by contract to provide a bid/ask at all times—if USDT went bust, BTC/USDT liquidity would evaporate very quickly. The contract would be irrelevant since the exchange would die. Either that, or their bid will be 0, like on 0DTE options that are far out of the money.
  - qeternity 5y ago
    Yes, I agree. But if all MMs withdrew but you had lots of other stickier liquidity, spreads might widen but it would cause a crash. Of course if Tether implodes, all the long term buyers will evaporate, which is my point: medium/long term price is dictate by swing and positional traders, not market makers. > Either that, or their bid will be 0, like on 0DTE options that are far out of the money. What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Source: career hedge fund options trader

trident5000 5y ago

I think it would increase as tether would need to dump into btc on exchanges like bitfinex and most know this dynamic by now. But who even cares. If it craters like it did during covid from fear selling it just comes back in a month or so.

arcticbull 5y ago
It only came back because of USDT. This is true according to the chat transcripts in the NYAG filings between Bitfinex’ Merlin and the money launderers they parked money with.
- trident5000 5y ago
  Surely you can provide a source for that (where exactly this was said)? As far as I have seen they dont show anything demonstrating this. And this tin foil hat theory about tether pumping btc has been debunked repeatedly.
  - arcticbull 5y ago
    It was in the NYAG settlement. [1] Transcripts here. [2] Merlin is Bitfinex/Tether CFO Giancarlo Devasini. [3] Oz and CCC is Oz Yosef - their contact at the Panamanian money launderer Crypto Capital Corp. Here, they parked almost $1B of co-mingled funds without a contract at all and had it seized by various world authorities. Merlin [15.10.18 10:01] I need to provide customers with precise answer at this point, can't just kick the can a little more Merlin [15.10.18 10:02] the international I mean CCC [15.10.18 10:02] I will keep you posted here CCC [15.10.18 10:02] On the process of all international payments. Merlin [15.10.18 10:02] please understand all this could be extremely dangerous for everybody, the entire crypto community Merlin [15.10.18 10:03] BTC could tank to below 1k if we don't act quickly For once, I believe Giancarlo. I recommend reading the rest of the transcripts in [2]. > And this tin foil hat theory about tether pumping btc has been debunked repeatedly. I mean, you can keep repeating that, but of course, it hasn't. I don't know there's conclusive evidence at this point although a massive class action suit against Tether for market manipulation was recently allowed to proceed by a judge after rejecting Tether's request for summary judgement. 5 of the 10 claims were dismissed - a few on technicalities - but 5 claims were approved to continue on the basis of suitably compelling evidence and off to court we go. [4] >> The court did dismiss RICO charges against the defendants. However, it found the plaintiffs adequately alleged monopolization, market manipulation, common law fraud, and violation of the Commodities Exchange Act. [4] I'll let the judge decide if it's FUD thanks :) [1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... [2] https://cryptonews.com/news/how-merlin-lost-patience-trying-to-save-bitfinex-s-usd-851-m-3760.htm https://cryptonews.com/news/how-merlin-lost-patience-trying-... [3] https://www.ft.com/content/4da3060c-8e1a-439f-a1d7-a6a4688ad6ca https://www.ft.com/content/4da3060c-8e1a-439f-a1d7-a6a4688ad... [4] https://protos.com/tether-market-manipulation-class-action-lawsuit-crypto-trader-new-york-court/ https://protos.com/tether-market-manipulation-class-action-l...