There’s always something happening on the blockchain-You need to know about this $80 billion weak point in the crypto ecosystem– USDT..
USDT has been through more legal trouble than most major crypto projects, and most people don’t know a thing about it…
Check this head-line out.
Unlike the Ripple ($XRP) vs SEC case, this case has a lot of merit…
Now I’m not saying this is going to send the market to zero. However, the issues Tether USDT has faced in the past are very important.
Especially considering what this could mean for the market if USDT was to ever fall…
TL;DR- The Tether debate and debacle is a little over-exaggerated. However, out of all the major stable coins Tether would be the one to worry about. They’ve been accused of not having a 1 to 1 treasury for their stable coins issuance and this could be a problem in the future for a lot of traders. They basically print money out of thin air, similar to the federal reserve. ZING. So keep this in mind as the space matures and develops. Even if you don’t own any $USDT, it is the liquidity used across most major exchanges. What happens if all the liquidity is just gone? Well, nothing good.
Tethers, The Sketchy Stable Coin’s Legal Obstacles
In 2019 Tether was in hot water from the court system.
A fraud allegation was brought against them for simply printing their stable coin out of thin air with no assets to back the creation of a new Tether USDT.
Let me boil it down for you in a simplified manner.
They were accused of using their stable coin to buy digital assets to increase their treasury holdings, with nothing to back their original creation of the stable coin itself.
I’m paraphrasing here, but that’s the gist of it. They basically have been accused of printing their “money” out of thin air. Remind you of anyone?
These accusations still circulate and permeate through the digital asset community.
How Tethers Legal Allegations Affect You
Even if you don’t own Tether $USDT, this affects you significantly.
So how does it affect you if you don’t hold any? One word, LIQUIDITY. Liquidity is key in every market. If there’s no liquidity then there are no trades. I personally stay away from USDT, the stable coin I use the most often is USDC. USD has faced close to zero legal trouble and has some huge names working with them in crypto. Another viable stablecoin is USDP, PAXOS is very regulatory friendly and also gives tokenized access to precious metals.
Tether is the underlying liquidity of almost the entire digital asset ecosystem. As I’m writing this it is ranked number 3 on Coin Market Cap.
So, what would happen if the liquidity of so many exchanges was simply no longer pegged as a one-to-one ratio of the United States dollar?
What would that fallout look like?
Well, it wouldn’t be a bullish indicator that’s for damn sure. This is why we preach strategies like Dollar Cost Averaging and most importantly using a hardware wallet.
It seems like a matter of time before this chicken comes home to roost. It won’t be the end of the digital asset market though.
However, it will impact the development of this space in a positive manner once it’s all said and done. Short term though, it won’t be beneficial for the price of many assets. Isn’t that just another opportunity knocking though?
Many digital asset communities and influencers blow the problems USDT has brought out of proportion. It will not be the end of the space, not by a long shot.
And its a step in the right direction. It’s always good to get snakes out of the grass, isn’t it? What doesn’t kill you makes you stronger. I feel like I wouldn’t have done my job correctly without giving you a fair warning over this issue. So don’t say I didn’t warn you.
Crypto never sleeps.