What happens to Bitcoin if Tether collapses?
What happens to Bitcoin if Tether collapses?
I like Bitcoin and I’m bullish long-term, but there’s one thing that keeps me up at night: Tether (USDT).
Right now, more than 70% of BTC trading volume is against USDT. That makes Tether the main liquidity engine of the whole market.
The problem? They’ve never fully proved 1 USDT = 1 USD in reserves. And many people believe it isn’t truly backed.
So here’s my question to the community:
What happens if Tether fails or loses its peg?
Does Bitcoin crash hard short term? Or does it ultimately strengthen BTC’s case as a non-fiat asset?
Curious to hear your thoughts.
You would think a short term crash would follow, but then again if people are trying to exit USDT, they might just end up buying crypto to do that. Honestly USDC might even have a temporary pump when you think about it, especially if exchanges get overwhelmed with USDT/USD trades and people are forced to find another option to exit to.