Hey everyone. I want to preface this thread by stating that I'm extremely bullish on Bitcoin going into 2021/22 and beyond, so don't take this as FUD.
I was recently having a conversation with some friends and we were discussing scenarios where Tether is shut down by authorities amidst the next bull run. There were lots of different theories shared, some bullish and some bearish, so I figured it's an interesting discussion for us to have in this subreddit.
Some questions discussed:
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Would such an event be macro bullish or bearish for Bitcoin price action in the short and long term?
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Does the USDT token price collapse if announced that the assets backing it have been seized/frozen? If so, how does this affect the crypto market as a whole?
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Since USDT's primary use-case is banking & accounting within/between CEXs, what's their next move in this scenario? Transition to an alternative stablecoin? Do they take a huge hit on their bottom line if not hedging such an event?
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In the scenario that the USDT price doesn't immediately collapse, is there a bullish exodus from billions of USDT into other coins/tokens?
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If USDT holders are awarded the opportunity to redeem their tokens for fiat, do most institutions decide to do so and thus remove billions in liquidity from many trading pairs? If so, how will this affect the price action of those pairs?
There were lots of other scenarios discussed within our group, so I'll add more as I think of them. Remember, I'm personally bullish and only asking these questions to spark a conversation around what seems like an impending certainty regarding Tether. Will it even matter, though?
Let's discuss.
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