[paulgb]

> Now, the question is one of market depth: can 20B be used to manipulate a 380B market.

I think the answer to this is yes, but I’d suggest a further specification: could it be used to manipulate a 380B market without breaking the dollar peg, which I haven’t been able to figure out a good mechanism for.

That said, I do think there’s a reasonably probable case where USDT unraveling is an existential threat to BTC: if a large portion of USDT reserves are actually in BTC, a run on USDT could cause Tether to start needing to sell BTC holdings at market to hold the peg, which would drive the prices down.

AFAIK Tether has not said that it is backed by USD, just by “assets”, and hasn’t completed an audit.