ticking time bomb for cryptos

Tether is a known.

I actually wrote an article about it in 2018.

Worst case, when you buy the money is flushed down the toilet (or transfer it to some 3rd party we cannot reach) . I don't think that is likely, as they have to manage the day to day fluctuations and to do that, they need funds.

So, next worse case, they flush some of it.. Doesn't seem likely, but, in essence this is the actual worst case since we know they don't do the first one. In this case, if a lot of people redeemed at once, they would run out of cash, and tether would crash. That's bad. No one is sure how bad, but given the ups and downs of bitcoin, I think it would have happened by now.

So, next worse case, they are putting part of the fiat into investments. Well, that's basically how banks work. It's called fractional reserve banking and if that's bad, the whole system is already screwed. In the event their investments went south, they MIGHT be a problem. I say might because investments make money. We have no idea how much money they've made. It might be a LOT. For example, assume they buy bitcoin sometime any day before now, they've made 100% or more on that.

So, final possibility, they are putting ALL the money in bitcoin. I don't think that's a real possibility.

Remember, what I would largely consider to be the smartest people on the planet are supporting and adopting crypto. These are largely visionaries. Yep, Elon has not, yet, but he also thought covid wasn't a big deal, so I think his intellect has some gaps.

In short, no, not a problem. This round is likely FUD put out to let institutions in a little more. They are well known for this and they are coming with huge amounts of money.

In short, I'm pretty much all in on crypto. Feel free to join me at r/yolocrypto.

Back in the 90s and 00s, many knew that the mortgage bundled instruments and ARMs were a looming issue, but for many years most sophisticated investors (very well known on Wall Street and the smartest of the smart) still thought everything was fine and dandy.

The challenge is that many of the views you hear from experts have their exposure and biases outside of a few. Many of these experts also build up their livelihood around btc, majors, and alts. You mentioned you were all in cryptos, so your comments do have a bias that needs a honest reflection. We all have our biases based on our exposures and beliefs.

I was very pro crypto since 2016 and had a higher than normal risk budget in my allocation to cryptos, with a view it could moon, and like you put the tether issue away thinking its a non issue at first, until I realized how large the size was and how much it propped up btc prices. Its a known when tether is issued, prices jump. The question is is there really dollar for dollar to back it up? I think most know the answer is no. If so the huge issue is everything seems fine until the liquidity dries up, and one day it will. Maybe not now, or for days/years, but it will. this black swan event could cause you not to be able sell at current market value or even pull your money out in certain cases.

There are more tethers than fiat in the ecosystem. May not seem so now, but when there is a run on the money, you may not be able to get your capital out compounded with the devaluation of your crypto holdings.

Of course if you dont believe in fiat whatsoever then it doesn't matter. But I think most who invest look in fiat terms for the value they hold, as the current ability to purchase goods and services is mostly in fiat.

also I'm not saying there will be a complete collapse, given its decentralized nature. but certainly can crash prices 90%+ easily if there was a run on tether to fiat, given the float used and what is available on market.

"Thoughts on this article" Is typically exactly what you did here.. Simply used to spread more fud. As a percentage of crypto, how much is tether?

If you don't already know, you should and if you think it is anything close to the same as subprime, why don't you short MSTR?

I don't think you get it. Its not a percentage of the total crypto value, but what is available for liquidity purposes i.e. float. Big difference.

You say its fud but what is your supporting arguments on what happens when there is a run to fiat? I'm open to any counterarguments and not against either way ( as I said I was pro crypto for many years) but to say its just fud without any supporting arguments is baseless.

Shorting mstr is a option but beyond my risk tolerance or time value. Short contracts have a decay value, and with the hype i don't have a idea how long this will run. If there are cracks in the ecosystem that starts showing, I guarantee that many hedge funds and opportunists will take that option - and why wouldn't they, its low hanging fruit to them.

You really think all the world famous economists vc companies, Fidelity, insurance companies, pension funds, etc that are coming over to bitcoin are missing something that large when it is has been called out for three years? That's forever in crypto years.

I'm sure we are both smart. I'm also sure that they know much more than I do and they wouldn't be here or they thought the risk was that high. Regardless, long term, the tech is the future.. If the tech is the future then I gotta believe in bitcoin. No room for doubt, I'm all in.

You really think all the world famous economists vc companies, Fidelity, insurance companies, pension funds, etc that are coming over to bitcoin are missing something that large when it is has been called out for three years? That's forever in crypto years.

What about when a real ETF option comes out and it becomes easier to trade?

Double purchase of $21 was found. So Bitcoin is now shaken.

$60k in February.... HFSP

What is the rationales or such an estimate or are you just shilling for your own benefit since you are all in?

Also you never answered about the fat tail risk with tether.