what happens to bitcoin if tether implodes?

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Poblopesco
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Joined: Sat May 11, 2019 5:42 am

what happens to bitcoin if tether implodes?

Post by Poblopesco »

I just learned about evidence of price manipulation of Bitcoin by Tether. Here's some background reading if you want more details:

viewtopic.php?t=335422
https://newrepublic.com/article/160905/ ... -investors
https://crypto-anonymous-2021.medium.co ... dcf78a64d3

It's pretty crazy to me because I thought the Bitcoin market was too big to manipulate. But if Tether is really being printed out with no real dollars backing it, then I wonder if Bitcoin's price is way overinflated (even more than skeptics think!)

1) How are folks who are long Bitcoin protecting themselves from any Tether fallout? I have read advice to stay away from Tether (https://prudentlycrypto.com/much-ado-about-tether/), but it seems like the ramifications to all of crypto are bigger than just not owning any or participating in any pools which have Tether in it.

2) What do you think happens to the Bitcoin market? On the one hand, I can see price going up because people will exit away from Tether. But on the other hand, if the value of Bitcoin was propped up by fake money (say 30% of Bitcoin propped by unbacked Tether), then doesn't its price fall by 30%, at some point?
MarkBarb
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Re: what happens to bitcoin if tether implodes?

Post by MarkBarb »

It's not an issue for investors, only for people that speculate on cryptocurrencies.
Marseille07
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Re: what happens to bitcoin if tether implodes?

Post by Marseille07 »

No one knows what happens next. I don't even understand why people exchange 36K for 1BTC today in the first place.
decapod10
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Re: what happens to bitcoin if tether implodes?

Post by decapod10 »

Nobody really knows, I've seen all sorts of speculation as to what happens if Tether implodes, ranging from no effect on Bitcoin, to short run damage but long term no problems, to catastrophic black swan event which destroys the entire crypto sector. On the flip side, if the Tether problem "isn't that bad", you might see it go the other direction.
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Schlabba
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Re: what happens to bitcoin if tether implodes?

Post by Schlabba »

Marseille07 wrote: Tue Jan 19, 2021 4:06 pm No one knows what happens next. I don't even understand why people exchange 36K for 1BTC today in the first place.
They hope for a bigger fool :happy
fallingeggs
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Re: what happens to bitcoin if tether implodes?

Post by fallingeggs »

So one buys Tether because it is “backed” by a dollar in a bank, yet there are zero audits of this? WTH? Financial statement audits have been around at least since the 1200s for a reason! What would one expect?

But who cares... crypto is whack and doesn’t belong near an “investment” portfolio. And there are other sites for gambling.
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arcticpineapplecorp.
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Re: what happens to bitcoin if tether implodes?

Post by arcticpineapplecorp. »

don't know and don't care.

i invest.

i don't speculate.

bitcoin and the like is speculation.

that's why your panicky type questions are of a speculative nature.

what to do?

don't know because I don't know what will happen.

will it go up 30% or down 30%?

pure speculation either way.

if you don't know, what makes you think I (or anyone else) know(s)?

when you invest in a properly diversified way you don't really worry about the individual components of your portfolio because you view your portfolio as a whole. Therefore you set things up in a way to achieve your financial goals over time. Not get rich quick (which often leads to losing money, for real and permanently) but build wealth slowly and over time:

https://www.etf.com/docs/IfYouCan.pdf

it's also helpful to have a plan called an investment policy statement so you don't have to worry or ask questions everytime "something happens" or "is about to happen". Your portfolio is built/designed with shocks to the market in mind. The stock market grew at 10.1% since 1926. This included the Great Depression, the Great Recession, 9/11, 73-74 bear market, dot com crash, WWII, Korean War, Vietnam War, etc.

See my signature for how to create an IPS.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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cos
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Re: what happens to bitcoin if tether implodes?

Post by cos »

There would likely be a correction of some sort, but Bitcoin has hundreds of other liquid trading pairs. Tether isn't the only way out of a Bitcoin position, just the most popular.
ohboy!
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Re: what happens to bitcoin if tether implodes?

Post by ohboy! »

hah, another FUD thread by a new member. someone trying to fill-up the google search results?

tether having an influence on bitcoin price was covered my mainstream media over 3 years ago. google it. funny they can't even come up with a new story. here we are... so i suppose we can count on it pumping the next bull run too.

use the search bar, this has been discussed plenty in the past 2 months. also this isn't the place to ask, 90% of the people here are absolutely sure that bitcoin itself will be worth next to nothing soon enough regardless of tether.

what will be interesting is if stonks implode and cryptos do not.
dru808
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Re: what happens to bitcoin if tether implodes?

Post by dru808 »

Ooohhhhh!!! Better sell my Bitcoin before the inevitable catastrophe.

lol.. 2 the 🌙!
Sptm 60 | Vigi 20 | Blv 10 | Btc/Eth 10
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novolog
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Re: what happens to bitcoin if tether implodes?

Post by novolog »

MarkBarb wrote: Tue Jan 19, 2021 4:05 pm It's not an issue for investors, only for people that speculate on cryptocurrencies.
I agree - not an issue for those that buy and hold bitcoin for the long term, only for those that are trying to make a quick buck ;)
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Scott S
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Re: what happens to bitcoin if tether implodes?

Post by Scott S »

What happens? We'll get even more entertaining threads here, of course. :mrgreen:
supersecretname
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Re: what happens to bitcoin if tether implodes?

Post by supersecretname »

Will it change the number from 21 million? No? OK then, it doesn't matter.
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codoriti
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Re: what happens to bitcoin if tether implodes?

Post by codoriti »

~70% of BTC buying today happens with Tether. 1 Tether = 1 USD, but tether isn't backed by anything except 1 USD of Monopoly money. The lawsuit should be very interesting, I have my popcorn and beer ready :beer

You can see the flows here: https://coinlib.io/coin/BTC/Bitcoin
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JonnyDVM
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Re: what happens to bitcoin if tether implodes?

Post by JonnyDVM »

For a serious answer I think the price of Bitcoin would crash 80% or so but not go to zero. The crypto market would probably adjust, make some effort to guard against future fraud, and it would start to creep up again. This is pure conjecture. I don’t think anyone knows which is why the price of Bitcoin jitters all over the place with many skeptics and a few die hard believers.
I’d trade it all for a little more | -C Montgomery Burns
Samosa22
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Re: what happens to bitcoin if tether implodes?

Post by Samosa22 »

JonnyDVM wrote: Tue Jan 19, 2021 10:37 pm For a serious answer I think the price of Bitcoin would crash 80% or so but not go to zero. The crypto market would probably adjust, make some effort to guard against future fraud, and it would start to creep up again. This is pure conjecture. I don’t think anyone knows which is why the price of Bitcoin jitters all over the place with many skeptics and a few die hard believers.
If BTC price goes down 80% I will liquidate 20% of my stock portfolio and will use the proceeds to buy BTC, going to write it in my IPS.
Diversification is protection against ignorance - WB.
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Corsair
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Re: what happens to bitcoin if tether implodes?

Post by Corsair »

Samosa22 wrote: Tue Jan 19, 2021 10:43 pm
JonnyDVM wrote: Tue Jan 19, 2021 10:37 pm For a serious answer I think the price of Bitcoin would crash 80% or so but not go to zero. The crypto market would probably adjust, make some effort to guard against future fraud, and it would start to creep up again. This is pure conjecture. I don’t think anyone knows which is why the price of Bitcoin jitters all over the place with many skeptics and a few die hard believers.
If BTC price goes down 80% I will liquidate 20% of my stock portfolio and will use the proceeds to buy BTC, going to write it in my IPS.
Why didn’t you do this last March when it was under $5,000?

If it drops 80% it will be $7,000.
All posts are my own opinions and are not financial advice.
ohboy!
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Re: what happens to bitcoin if tether implodes?

Post by ohboy! »

codoriti wrote: Tue Jan 19, 2021 10:28 pm ~70% of BTC buying today happens with Tether. 1 Tether = 1 USD, but tether isn't backed by anything except 1 USD of Monopoly money. The lawsuit should be very interesting, I have my popcorn and beer ready :beer

You can see the flows here: https://coinlib.io/coin/BTC/Bitcoin
This is misinformed at best. There has never been any suggestions that Tether has zero backing. While I doubt they have 1 USD for USDT, your statement is completely false. 70% of BTC bought with Tether is misleading as well. This is mostly leveraged trading on Binance. That is to say one person can buy and sell bitcoin 50 times in one day using USDT, they are trading, which can also be shorting. And the number for today is, as per the site you mention, is 58%.

There have been several studies and reports that Tether, if anything, manipulates the price of BTC down, not up. Despite one report that made headline news in 2018 of Tether being some fake price stimulator for Bitcoin, it's now 3 years later and the same song and dance.

I have bitcoin, and ethereum, and have never owned tether. I'd like to see it go down actually, and am not afraid of it's impact on my coins. While I don't like tether, you should at least know more than some tweet that says tether has no backing, just monopoly money, before you go spreading your knowledge. This "threat" has been around since before Tether changed their statement on their website, and most crypto enthusiasts don't like tether. The disingenuous way of portraying it is to pretend like tether is some scam where someone is making balances out of air to buy all the bitcoin with. The volume on Binance doesn't come from nowhere, when someone trades for tether they are trading for that equivalent USD value. Most often it's a temporary hold inbetween trades.

For stablecoins, I recommend USDC as a centralized alternative, or DAI for decentralized.
Samosa22
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Re: what happens to bitcoin if tether implodes?

Post by Samosa22 »

Corsair wrote: Tue Jan 19, 2021 11:00 pm
Samosa22 wrote: Tue Jan 19, 2021 10:43 pm
JonnyDVM wrote: Tue Jan 19, 2021 10:37 pm For a serious answer I think the price of Bitcoin would crash 80% or so but not go to zero. The crypto market would probably adjust, make some effort to guard against future fraud, and it would start to creep up again. This is pure conjecture. I don’t think anyone knows which is why the price of Bitcoin jitters all over the place with many skeptics and a few die hard believers.
If BTC price goes down 80% I will liquidate 20% of my stock portfolio and will use the proceeds to buy BTC, going to write it in my IPS.
Why didn’t you do this last March when it was under $5,000?

If it drops 80% it will be $7,000.
I was stupid.
Diversification is protection against ignorance - WB.
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