The Biggest Threat To Cryptocurrency
We need to be mindful of those pitfalls that can take things down. With the crushing of UST, it is vital that we be diligent in our focus.
In this video I discuss the threat Tether can pose to the entire crypto system. There is a massive exposure that could cause a major crash if people lose faith in it.
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BEERKING.Without watching the video and only responding to the title: the biggest threat to crypto is the legacy system actually operating correctly and without corruption (or mitigated corruption).
Ah Tether!
I shall now continue watching magic box.
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You seem to be implying that USDT can be converted into USD 1:1.
Where can I do this?
Is Bitfinex actually offering this service?
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Tether (USDT) is currently worth $0.9976 USD. In the previous 24 hours its lowest price was $0.9485 USD, and its highest price was $0.9977 USD. If any exchange is offering an 1:1 USD conversion option for Tether (USDT), then they are doing it at a loss.
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One of my early crypto mentors used to talk about what a mess Tether is in 2016 and would always mention what a problem it would be if it crashed.
It certainly would create a lot of panic if the peg missed by much.
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One of the first things I was told when I got in crypto was to stay away of Tether
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We have to be mindful, these are lessons to be learnt and not be clouded by confidence
I think most stable coins are based on faith and nobody really knows if they can really back up all the cash they have behind the tokens.
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True if the faith of people go down with tether then it will be the biggest downfall in the history of crypto market.
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What is actually happening in crypto ? what collapses it right now ?
Those who consider the drop in crypto this week as a chance to purchase more hive will benefit greatly in the long run. We have to make the most of this situation by powering up an additional hive. Thank you for this sir @taskmaster4450 .
We use Stablecoins. And I think Stablecoins are not risk-free. What just happened to UST, now people are more concerned when they put some money in Stablecoins.
There is a lot of controversy around Tether. Recently USDT price dropped a little bit. Now it comes back to $1. What if USDT loses its peg? It will adversely affect the whole crypto market.
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Summary:
In this video, the speaker discusses the potential threat to the cryptocurrency market posed by stablecoin Tether. He highlights the lack of a one-to-one backing of Tether and the implications of this lack of sufficient reserves. The speaker explains how Tether's instability can lead to liquidity issues within the crypto market, causing volatility and potential collapses. He touches on the importance of liquidity pools, the need for more robust stablecoins, and the potential role of USDC in stabilizing the market. The speaker concludes by emphasizing the fragility of the industry, especially in the aftermath of recent events like the UST and Luna incident.
Detailed Article:
The speaker begins by addressing the significant threat that Tether poses to the crypto market, emphasizing that the issue goes beyond recent incidents involving UST and Luna. He points out that Tether's purported backing of $89 billion is dubious, suggesting that the actual reserves are considerably less, possibly by tens of billions. The lack of a one-to-one backing becomes a central concern, as it leads to the continuous shifting of Tether's peg, creating arbitrage opportunities that can strain Tether's resources over time.
Moreover, the speaker explains the potential consequences if Tether fails to maintain its peg and the impact it would have on the broader market. Given the widespread use of Tether as a trading pair, its instability could lead to a drastic reduction in liquidity, affecting the ability of markets to function effectively. This liquidity crunch, if materialized, may escalate market volatility and trigger further price drops, with Bitcoin likely to bear the brunt due to its high trading volume.
Furthermore, the speaker highlights the importance of liquidity pools and the necessity for stronger stablecoins to prevent such market disruptions. He mentions USDC as a potential alternative to Tether, citing Circle's proactive steps such as applying for a banking license and committing to audits as factors that could enhance trust in USDC. The speaker speculates on the potential growth of USDC and its role in bolstering market stability and liquidity in the future.
In conclusion, the speaker underscores the precarious nature of the current crypto landscape, reiterating the industry's vulnerability and the need for resilience in the face of challenges like unstable stablecoins. He urges vigilance and cautions viewers to remain attentive amid the market's volatility while acknowledging the industry's growth and development over the years. The episode serves as a reminder of the risks associated with inadequately backed stablecoins and the ongoing efforts to fortify the crypto market against potential upheavals.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.