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.
What happens to Bitcoin if Tether collapses?
byu/emojidomain inCryptoMarkets
Posted by emojidomain
18 Comments
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.
It would really depend on the details of the collapse and the subsequent market dynamics, but probably a short term crash like 20-40% and USDC having like a 10% mini pump that slowly retraces over time.
Good news is that BTC is fully backed.
Is USDC a safer option?
https://cointelegraph.com/news/tether-us-treasury-holdings-surpass-germany-q1-2025
Where does this fud even come from? You don’t think the federal government would say something if they didn’t hold the money that they report?
I believe this will create negative sentiment in the short term, as the collapse of USDT will lead to liquidity shortages across all cryptocurrencies, including BTC.
However, we still have USDC as an alternative.
bad happen
CEX and inflated tokens will die.
Decentralized ones Survive.
Good news for DAI and USDC and other stablecoins, I guess?
Yeah Tether is going to collapse 🤡
It’s the most profitable company in the world, on a per employee basis, has huge investments across tech and beyond, but yeah it’ll collapse 🎪
Pure stupidity 🤡
I dont see Tether anywhere in Bitcoins code.
Bitcoin is designed to survive on its own
Bitcoin isn’t dependent on Tether fundamentally, but markets are. So yeah, volatility would go insane if USDT depegged
Nothing would happen but another step
Thether and all shitcoins are a smoke screen to bitcoin
I have zero faith in Tether and avoid it like the plague.
A buy opportunity
Down goes frazer !!
RLUSD will replace USDT. Just like how Mt. Gox was a fart in the wind and got replaced by other exchanges.
If it could it would have already