Why do people think that Tether will take down crypto if it implodes? The market survived the implosion of Mt Gox, which was much more severe.
By this point everybody knows that Tether has junk status. Much ink has been spilled about the matter. It's hardly a secret.
A few years ago when Tether was the only stablecoin, then yes it's implosion would have been catastrophic. But now anybody using Tether clearly has some (good or bad) reason to do so. There's simply not enough people living under rocks to be surprised when the thing collapses.
Agreed, and I was doing cross exchange arb with mt gox in 2012 and knew never to keep anything on there overnight when I wouldn't run the bot.
I think this quote from somewhere describes this best: "It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so."
If you ask me, i think the big thing™ most people trust and don't question that's pretty much backed into tradfi mm funds and centralized crypto stablecoin reserves alike is US treasuries. Most assume that they are super safe and that nothing can go wrong, however most ignore or are in ignorance of the rehypothication of them in eurodollar markets (and the rehypothication of collateral more generally). The heavy usage of them as collateral in the post 2008 monetary system has basically tied the super-safe-risk-free-asset™ asset to the credit risk of the most junkiest actors globally (that for the most part, whose balance sheets go unseen and will never see the light of day).
I sort of agree. I think people know they're taking a risk with Tether, but they think they'll get out in time. Maybe they're right. Maybe it will be slowly and then all at once and if you get out in the slowly phase you'll be fine. People did that with Gox.
Everyone certainly knows the risk exists by now. And the markets keep on chugging.
By this point everybody knows that Tether has junk status. Much ink has been spilled about the matter. It's hardly a secret.
A few years ago when Tether was the only stablecoin, then yes it's implosion would have been catastrophic. But now anybody using Tether clearly has some (good or bad) reason to do so. There's simply not enough people living under rocks to be surprised when the thing collapses.