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Bitcoin News - Industry Experts Cast Doubts on Possible Tether Fallout Tanking Bitcoin Price

  • Alex Morris
    📰 News

    If Tether loses its peg for good, it may eventually trigger another rally, eToro’s analyst claims

Industry Experts Cast Doubts on Possible Tether Fallout Tanking Bitcoin Price
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Tether (USDT) has been on everyone’s lips this week since its crash conveniently coincided with a minor market rally, which even more fueled speculations about Tether’s influence on Bitcoin price. Top experts have recently weighed in on whether Tether has the power to tank the crypto market, and whether the biggest dollar-pegged stablecoin will survive the bloodbath.

👉MUST READ Binance CEO Involved in Publicly Assumed Bitfinex-Tether Connection: Research

A worrying sign for investors?

Tether (USDT) has always been the subject of controversy due to its lack of transparency and alleged market manipulations. The fact that Tether is losing its peg should be concerning enough for investors (the coin’s value should strictly remain at $1). Tether constantly faces insolvency accusations from critics who claim that there is not enough fiat money to back the token’s price.

eToro’s analyst Mati Greenspan claims that the rising volumes of Tether are reaching their critical, and a bevy of new stablecoins will balance out the market. As U.Today reported earlier, stablecoins are on the rise with some of the major ones, including the Winklevoss-backed Gemini Dollar (GUSD), being listed on major exchanges.

No need for overreactions

So, is this the end for Tether? Will Tether drag the whole crypto market into the abyss? Greenspan doesn’t think so. He predicts that “the worst-case scenario” would be another bull run.

This point of view is supported by CTO of Zoom Simen Reynolds who doesn’t think that Tether’s fall — if it indeed happens — will somehow affect Bitcoin and Ethereum. That being said, he is still certain that Tether won’t see a bright future, being potentially replaced by another stablecoin. Gemini Dollar, which was called one of the best things that could happen to crypto, appears to be a viable contender to potentially dethrone Tether. Unlike Tether, Gemini Dollar doesn’t have to battle accusations about “wash trading” and the lack of regulations. On Oct. 15, the coin lost its peg and soared above $1. However, Gemini Dollar was also criticized by decentralization hardliners since Gemini has the power to freeze any account.

Meanwhile, Invictus Capital CEO Daniel Schwartzkopff claims that Tether has a “smart business model.” “If the coin won’t be able to get back on its peg, they [Tether] can buy their own tokens,” — he said.

👉MUST READ News of Binance Dropping Tether (USDT) Are Reportedly Fake

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Bitcoin News - Three Major Problems Stablecoins Can Impose on Market

  • Yuri Molchan
    ⭐ Features

    It is not all so cheerful about fixed-price crypto coins

Three Major Problems Stablecoins Can Impose on Market
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As of late, the Coinbase announced the listing of USDC (USD Coin) emitted by the Circle startup. Many more similar asset-pegged tokens are emerging. The most popular projects so far, such as TrueUSD (TUSD) and Gemini Dollar (GUSD), are gradually minting more coins and broadening their reach. Meanwhile, the former leader Tether (USDT) is being promptly taken out of the market.

Below are the major troubles that stablecoins may cause for their investors.

Centralized grip

Regardless of what coins are pegged to, they are emitted by one central entity. Everything about stablecoins has been planned in advance, even the code and market behavior. So, the emitter may decide to increase the supply, for one thing.

There is no limit to that, unlike with any other decentralized crypto, such as Bitcoin or Ether, where the supply is limited by the code to imitate money that cannot be harmed by inflation. With stablecoins, however, the supply can be endless.

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Besides, an asset-pegged coin is also a financial instrument which can be used indirectly or deliberately to manipulate the market.

Control over holders’ accounts

When you deal with Bitcoin or Litecoin, for instance, nobody is able to seize your coins unless through a cyber attack. However, the protocols of some coins enable their makers to freeze wallets and the entire balances along the way.

Paxos Coin can do that, and so can USDC. Actually, all stablecoins based on the Ethereum ERC20 standard can be controlled. The same thing can happen with XRP, even though it is not a stablecoin.

This time centralized control can harm each user personally. At present, when any crypto can be considered dangerous and illegal or used for criminal purposes, this is certainly a real possibility to get your balance frozen.

👉MUST READ New Coinbase’s Stablecoin (USDC) Watches Accounts, Can Freeze Tokens at Will

Attacks against the USD peg

Some of the stablecoins are protected by nothing but their algorithm. This makes them vulnerable to what is similar to a Forex trading attack on a fiat currency. When experts in their craft attack the USD peg of a stablecoin, they can get a certain profit.

If we think of the current withdrawal of USDT from the market, that thing happened out of the blue despite whole months of skepticism before it. Anyway, there can be deliberate attacks against some stablecoins to bring on fluctuation to earn profits.

Numerous Forex experts believe that stablecoins are rather vulnerable to exchange rate attacks and these coins’ teams are not even aware of the fact.

👉MUST READ Crypto Prices Can Be Predicted, Says Science

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