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I wonder how Tether getting broadly delisted would impact crypto prices. Theoretically, its cash on the sidelines, so shouldn't impact the price. Increases th
by cwkoss 4y ago
I wonder how Tether getting broadly delisted would impact crypto prices.
Theoretically, its cash on the sidelines, so shouldn't impact the price.
Increases the likelihood of tether imploding as withdrawals shrink the proportional size of any reserve issues. That could certainly create a lot of negative attention, raising fear and dropping price.
Practically, I think tethers are often cash set aside for purchasing crypto in the future, so I wonder if this will lead to a significant portion USDT converting into BTC and other cryptos to become more 'liquid' in terms of transferability within the crypto banking system. (Not all exchanges people hold Tethers on are necessarily hooked up to their banking info for a wire transfer). Some might trade to BTC to move the value, which could increase price.
Who knows, will be interesting to see how it plays out if/when it plays out.
- ivalm 4y agoI think it just pushes these markets to switch to usdc, which is a good thing as (1) making crypto more tied to audited assets (2) make redemption subject to AML.
- hestefisk 4y agoAgree. People bought tether to have a stable store of value so it will only push funds into USDC or similar.
- vkou 4y agoAssuming that Tether is a fraud...: The problem is that Tether is either worth $1 (Current status quo), or $0 (When everyone loses faith in it.) It will transition from one to the other at... Some point. And there will, by definition, be a lot of bagholders who have not managed to redeem it in time. The rest of the ecosystem will not have a soft landing from that. Oh, sure, anyone who bought USDC will be fine, but all the non-pegged coins will be in for a very, very rough ride.
- loopdoend 4y agoHow is $0 even possible? It seems to me it must be at least partially backed.
- deleted 4y ago[deleted]
- diab0lic 4y agoEveryone withdrawing when they have money gets $1, everyone trying to withdraw after insolvency hits gets $0. If this were to occur the secondary market would bear some small but nonzero value representing the off chance that it is a liquidity issue and not a solvency issue.
- dragontamer 4y agoLet's say there is 60 Billion total Tether, but only $30 Billion backing it. As soon as people realize the issue, they will trade USDT for USD. Tether will defend the peg, spending $30 Billion to hold it's value at 1 USDT for $1. Thirty Billion later, the overall situation is 30 Billion USDT remaining, but the bank vaults are empty nothing left over to defend the peg. At this point, USDT snaps to $0 very quickly.
- ericd 4y agoI imagine that if it's partially backed, and everyone tries to redeem, and they try to defend the peg in order to not admit that it's insolvent, then they'll redeem at $1 until they can't, at which point it will be worth ~$0.
- Galanwe 4y agoJust trying to be picky: The most likely scenario is that Tether is _overall_ solvent, though not in liquid assets. What would likely happen in case of a bank run is: 1) Tether will defend the peg and redeem at $1 2) Tether will freeze redeems because of limited liquidity 3) Tether will fill face huge pressure and regulatory threats 4) Some people will want to exit USDT immediately at a discounted price (say $0.5), while some others will buy discounted USDT hoping once Tether solves its liquidity issues or bankrupt they could get more than $0.5 per USDT. TLDR: USDT will most likely not go to $0 in case of default. Most likely there will be speculation on Tether's illiquid assets value that could be sold back to pay creditors.
- jboy55 4y agoGiven its either worth what you paid for it and there is a non-zero risk its work zero, there is absolutely no reason you should ever own it for more time that its absolutely required.
- imachine1980_ 4y ago>prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative Both are derivative do Both will be block probably
- deleted 4y ago[deleted]
- dibt 4y ago> I wonder how Tether getting broadly delisted would impact crypto prices. No reason to think it affects prices at all. The exchange would offer a cash pair or other stablecoin pair. Most centralized exchanges are combining stablecoin pairs anyway to transparently offer one USD pair. Tether is most often used as a pair on derivatives (ie perpetual futures). An exchange won't delist tether without having an alternative for perps. The only reason anybody brings up this stuff is because of all the narratives people spin about tether.
- thirtyseven 4y agoAt the limit, the exchange would only redeem it at par if Tether the company can also do so, right? That's the big open question since Tether has never publicly completed an audit.
- Galanwe 4y agoTether did complete audits. The results are mixed. They have a mix of treasuries, junk bonds and cash. Definitely not as risk free as they should be, but not to the point where you could call it a Ponzi. Overall a global move to another stable coin would be good, but it takes time. A state managed stable coin backed by the BCE or fed would really help.
- ABeeSea 4y agoThey did an attestation which is not an audit.
- deleted 4y ago[deleted]
- polyomino 4y agolike anything the government bans, price will go up
- giaour 4y agoExactly! Like leaded gasoline or children's toys made with arsenic.
- vkou 4y agoWhy on Earth would anyone pay more than $1 for a USDT?
- Gigachad 4y ago[flagged]
- jasmine999 4y agoBecause there's many areas on earth where one cannot access USD, so USDT is quite nice, even if you over pay for it.
- vkou 4y agoLike what? North Korea? Because I'm drawing a blank for the rest. Even in Russia and Iran you can own and transact with USD.
- coffeebeqn 4y agoYou certainly can’t get $1 for literally $1 anywhere unless you are using an American bank/credit card that you are an American customer of. The exchange rate is far worse
- vkou 4y agoWhat makes you think the spread on turning Pesos (-> BTC) -> USDT, or vice versa is any better? Market makers and exchanges don't work for free. And since you can't buy groceries or pay rent with tether, and you need to convert it from/to fiat, you're not actually solving any problems by using it.
- autokad 4y agoI think the withdrawals thing you said could lead to more FTX like implosions.
- yieldcrv 4y agoThe sooner the better The biggest leaps in the crypto sector come from external action. Collectively, everyone knows how to do better more resilient stable value. Collectively, everyone knows the limitations of custodial arrangements. They just won't act, en masse, until they have to. If the government stayed out of crypto we would all be using single signature accounts with Silk Road having a monopoly and crashing every few hours on super slow Onion routes, just like it was 2012.
- benatkin 4y agoIt really doesn't matter for the interesting things happening in Crypto. Bitcoiners are fine with the price changing. Web3 and other utility including cheap and fast value transactions (think Lightning and Cardano) will continue to focus on the tech and adoption. Sure some will be discouraged from using something volatile for payments but this will show something volatile is better than a failing "stablecoin". So I won't even say the sooner the better. I don't know what the best timing is. No matter the timing it will help some and hurt others. That's what happened in the 2008 bailouts.
- deleted 4y ago[deleted]
- ww520 4y agoProbably little impact. The spot prices you see on the exchanges are manufactured to an extent, via wash trades. Large block size crypto trades are done off the exchanges with lower price. How low nobody knows.