According to a lot of research groups, Bitfinex and tether/USDT have reportedly been “partners in crime” in a lot of malicious activity that has surrounded either the exchange or the stable coin.
The ugly relationship seems to be surfacing again and this is something that I usually ignore given I don’t actually hold USDT/tether and have accepted that at some stage tether/USDT could collapse, people could get burnt, but the market would correct. That would mean opportunity for those on the right side of the correction and those who are not heavily invested in this asset.
The current USDT/tether panic has caused a great deal of capital flow through the market: USDT/tether was the second highest traded digital asset over the past 24hours (2.5bil) compared to only $9.4 million from its closest competitor TrueUSD. USDT/tether trade volume ceded only marginally to Bitcoin.
Traders now flee USDT/tether as uncertainty mounts .USDT/tether has now lost its pegg, as has TrueUSD and the Gemini Dollar.
Looking at the graph above you will see that USDT/tether went as low as 80c to the dollar. Conversion of USDT into other digital assets is likely to cause a short term rise in digital asset prices but given the relatively small market cap of USDT/tether (against the market as a whole) I don’t see this having much impact on immediate asset prices.
However, the mid to long term effect could go one of two ways.
1- FUD causes investor panic and sell off of digital assets back to Fiat, we drop below Bitcoins Point of Control POC and fail to hold the current price levels. 2- FUD will cause a small price drop. The rest of the market not yet invested or the whales looking for the perfect opportunity will make their surprise entrance.
I have come up with a scenario 3, 4 and 5 but I chose to back situation number 2. I will hold my BTC, ETC, ZEC, NEO, GAS and ZEN and play the long game.
I agree on scenario 2 - shorting tether on kraken big as it couldnt get fixed and we will get a breakout on BTC which nobody could think of. All the eyes and retail shorts are on the breakdown of the "Great Knife" - Shorts at ATH and Tether as a catalyst to push through. Crazy will happen and the squeeze could end in a spike on all exchanges above 6800 and hold this time not only on the usdt traded ones. XRP didnt tested its double top and it really could do this from a TA standpoint, most alts over the board bottomed out as well. Thanks for sharing this rare one!