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by gruez 1828 days ago
>So you would likely see BTCUSDT panic bid (until the Tether exchanges presumably stop withdrawals) and relentless selling of BTCUSD. For those who managed to get out, they will have round tripped their USDT to USD, but BTCUSD will be a bloodbath.

But if they're buying BTC only to convert it back to USD again (at a non USDT exchange), wouldn't the net effect on BTC be zero?
1 comments
qeternity 1828 days ago
No, it would have the effect of all the BTC on unbanked Tether exchanges being sent to banked exchanges to be sold for fiat. So the price would be high in USDT terms and low in USD terms. This is how the "peg" breaks.

BTC/USDT only goes up because the denominator (USDT) goes to zero.

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