What happened to 12 million BTC?

[RedDuke]

Here is my question... Let's say Tether goes away ... sure X% of the current volume is via tether (though I haven't fact-checked this stat, let's assume it's true).

If it goes away, why cant that BTC trading just be facilitated by more reputable, audited stablecoins? Id think that could be a negative short term for BTC, but very positive long-term (we wouldn't have to hear about tether anymore).

Why does this mean BTC will go down 90%???

If/When Tether goes away, and BTC only trades for real money or audited stable coins, the fear factor goes into affect just like in any other market on the face of the planet. What I mean by fear factor is fear of loosing money. Fake money, created with a push of a button by 4 dudes in BitFinex have no fear, real money do.

Then we will will see what the real price on BTC is, and btw in the long run it might turn out to be advantageous. BTC will most likely crash hard, this would bring many new investors, and once spot ETFs are approved it will most likely raise like a Phoenix from the ashes.

 

[Pekelo]

why cant that BTC trading just be facilitated by more reputable, audited stablecoins?

It could. The problem with stable coins though, that because of the unregulated nature of the market, there is no incentive for an issuer NOT to issue non-backed coins. The temptation is too big and there is almost no repercussion or negative consequences for them. Thus it is safe to say that most if not all stable coins have at least some unbacked portion. Imagine that you can generate money for free. Why wouldn't you?

So if Tether goes down and users are able to switch to other stable coins, chances are that they will have the same issue there sooner or later.

 

[GlobalMacro90]

It could. The problem with stable coins though, that because of the unregulated nature of the market, there is no incentive for an issuer NOT to issue non-backed coins. The temptation is too big and there is almost no repercussion or negative consequences for them. Thus it is safe to say that most if not all stable coins have at least some unbacked portion. Imagine that you can generate money for free. Why wouldn't you?

So if Tether goes down and users are able to switch to other stable coins, chances are that they will have the same issue there sooner or later.

These are very fair points. I would say tho that US regulations are coming, and stable coin regulations are going to be priority number 1 (as they should).

I see a situation in the not distant future where all stable coins will have to be audited, show what they own, etc. Similar to the current "2a7" money market fund rules. After all, stable coins are just the crypto versions for regular old money market funds.

So I don't think there will be a bunch of other tether type situations. Stablecoins in the future will be highly regulated and this is a good thing IMO.

I don't get the fake money thing at alltho to be honest. So you put real USD in and you get tether out. That USD is invested in (what should be) very safe securities. Now tether is shady, which we all know, so they could have invested in not safe securities. But it's still not "fake money". I still don't get the argument why tether would cause BTC to go down 90%

Do you have another theory besides the "fear factor"?

 

[Pekelo]

Do you have another theory besides the "fear factor"?

Government could decide that issuing stable coins is essentially running a bank (or investment firm at minimum) and you need a banking license to do so. Or if they don't like pegged cryptos they could outright outlaw it.

Another thing is that shorting a stable coin is almost without risk. After all it should never go much higher that the peg, but it can collapse. So shorting it makes way more sense.

Instead of asking us, why don't you just google "criticism of stablecoins"?

Start here:

https://www.nytimes.com/2021/09/17/business/economy/federal-reserve-virtual-currency-stablecoin.html

http://www.wakeforestlawreview.com/...nherent-fragility-of-algorithmic-stablecoins/

 

[RedDuke]

These are very fair points. I would say tho that US regulations are coming, and stable coin regulations are going to be priority number 1 (as they should).

I see a situation in the not distant future where all stable coins will have to be audited, show what they own, etc. Similar to the current "2a7" money market fund rules. After all, stable coins are just the crypto versions for regular old money market funds.

So I don't think there will be a bunch of other tether type situations. Stablecoins in the future will be highly regulated and this is a good thing IMO.

I don't get the fake money thing at alltho to be honest. So you put real USD in and you get tether out. That USD is invested in (what should be) very safe securities. Now tether is shady, which we all know, so they could have invested in not safe securities. But it's still not "fake money". I still don't get the argument why tether would cause BTC to go down 90%

Do you have another theory besides the "fear factor"?

I call USDT fake money because this is what it is. They admitted that they are backed by only 3 or 5 percent cash and the rest are commercial papers. Bloomberg interviewed every major desk that deals with commercial paper and non ever saw them trading a single one. At 80 billion they would be within top 10 commercial peeper holders in the world. You do the math from here.

 

[johnarb]

Here is my question... Let's say Tether goes away ...

If it goes away, why cant that BTC trading just be facilitated by more reputable, audited stablecoins?

SBF started his way to becoming multi billionaire because there was arbitrage opportunities between exchanges because legacy finance, i.e. fund transfers using banks take too long and can have problems

I'm transferring funds from bank accounts in order to pay a big tax bill from last year, and as expected, already got a fraud call for one of the transfers that is less than $20K

And these take 1-3 business days, and don't work after hours, or weekends, or holidays

I transferred over $100K worth of Tether in 1 night (coz of Bored Ape purchase), and no issues whatsoever. Blockchains work even in the middle of the night. Takes minutes even if broken down into $20-$30K chunks

I can't wait until Tether is accepted everywhere even for taxes. These legacy finance banking is crap

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Big exchanges like Binance and FTX prefer stablecoins like Tether since there's no chargebacks and instant settlements for hundreds of millions of $ worth and no after hours or business days bullshit, operate 24/7/365, and no holidays


Yes, there's a reason Tether and other stablecoins are the ones dominating the trading volume, because they are so much better than fiat

https://twitter.com/x/status/1511616511902949377