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by tobltobs
3118 days ago
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> If traders lose faith in Tether, they would sell Tether and buy Bitcoin in a flight to safety. Bitcoin prices would rise as traders try to get out of Tether. That might be the outcome, however: - If there would be the slightest bit of panic btc transactions would be congested for days. - If people would loose money by Tether their btc margin positions would be getting closed. - Because they loose faith in one crypto they would by another? |
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We saw this in Mt. Gox. When USD withdrawals failed and people suspected Mt. Gox was insolvent, the only way to get money out was to buy BTC and withdraw that. The Mt. Gox exchange rate inflated because everyone knew dollar balances on Mt. Gox were worthless.
If Bitfinex is insolvent and Tether fails, we'll probably see panic selling across the market as people start fearing Bitcoin is a giant tulip scam.