How Tether’s Failure Will Trigger The Collapse Of The Bitcoin (BTC) Facade
The Impact Of Tether’s Implosion And The End Of Days For Bitcoin Maximalism
Centralized stablecoin Tether ($USDT) is again issuing billions of new tokens flooding the market with fake liquidity backed by empty promises and broken dreams of Bitcoin moonshots.
Just like Do Kwon’s stablecoin scam, depegged and dragged with it Terra Luna, equal will be the downfall of Bitcoin (BTC) once Tether implodes.
Tether ($USDT) fits the maximalist narrative, though, since all that is left for Bitcoin (BTC) is the price speculation after remarkably failing to proceed with a proper P2P Electronic Cash system, as the whitepaper describes.
Thus, it fits the maximalists’ narrative promoting a stablecoin with a shady history, no audit, and a Bernie Madoff operating model.
Bitcoin is quickly running out of time. A possible and permanent depeg of USDT will throw Bitcoin (BTC) into obscurity.
The liquidity sustaining BTC at this unreasonable valuation comes with unstable foundations.
The downfall of citadel-fantasizing Ponzi lords, social media and YouTube shills/influencers, and the scammers selling dreams of decentralization is closer than ever.
Don’t be surprised when the collapse begins. Prepare for the worse.
Where Will The Bitcoin Bottom Be?
Terra Luna and UST crashed together as UST depegged.
FTX was filling gaps worth billions of dollars with a fake price of FTT at its exchange.
Tether has never produced an audit of its balance sheet and has generally refused to name its banking partners — Forbes
Tether has recently started minting USDT again, reaching $75 billion tokens (and market cap).
When Tether (USDT) collapses, Bitcoin’s price will fall to levels not seen for a decade.
Will There Be A Bottom For BTC?
In this case, nobody can define a bottom. Maybe it goes down to $1,000, maybe at $100. A tsunami of liquidations and funds rushing out will immediately follow the USDT collapse.
When trust in $USDT is lost, do not expect to catch a falling knife with BTC. The dust of the financial fallout will not settle until years later. First of all, all your USDT will be worth nothing. The USDT backing BTC will be worth nothing. The BTC owned by Tether will be worth nothing.
Bitcoin (BTC) will plunge into a black abyss.
A complete loss of trust in the price of Bitcoin will make everyone skeptical, even hardcore maximalists. However, they have already considered the risk Tether poses to their investment but failed to explain this economic vulnerability of BTC to new investors.
How Will Exchanges React?
The price collapse of BTC in exchanges will be instant. They will pause trading and withdrawals and will stop functioning. Exchanges will announce the money is SAFU and pretend nothing happened, but they will all be trying to find the exit at the same time.
Most crypto exchanges will go down, except perhaps a few with skin in the game.
Exchange CEOs that act as evangelists and always make promises of loyalty and support for cryptocurrency will be the first ones out.
Think of Quadrica’s CEO, Gerald Cotten, or Onecoin’s founder, Ruja Ignatova, and how it all played out. In a world of eight billion people, it is easy to change one’s identity, alter facial details and become unrecognizable.
Concerns will emerge that will even generate viability issues for Bitcoin and crash the rest of the market, except one part of it.
A Cascade Of Catastrophic Events For BTC
As Bitcoin’s price moves well below the production cost, (most) miners will stop supporting the chain. The Death Spiral will then take effect.
The death spiral of Bitcoin becomes more relevant as Tether keeps rising in market cap. There is a threshold, and once it is crossed and combined with a few more circumstances, Bitcoin’s demise is inevitable.
The gap between the average mining cost and the price of BTC will be a detrimental factor to Bitcoin’s survival.
Maximalists and professional social media shills mock this thought experiment based on their interpretation of game theory.
The same people that promote irrational speculation are those who will sell first and look for the exit, having inside knowledge.
The Miners’ Plan B
Miners will move to plan B. They will divert hashpower to other SHA256 networks with no affiliation to Tether but persistence in supporting P2P electronic cash.
While maximalists dismiss any possibility of this scenario developing by presenting random game theory propositions, some insightful people in the market already know where this is all going.
Bitcoin miners will not shut down as the BTC price declines below the profit zone, but they will divert their ASICS (the mining hardware) to other coins functioning with the SHA-256 algorithm.
Miners are businesses driven by profit. Once profit is gone from mining BTC, there will be value in the rest coins using the SHA-256 algorithm as long as they provide profitability. This move by miners will trigger a transition of investors as trading algorithms will instantly react.
Maximalists Support Decentralization?
Bitcoin maximalists supposedly favor decentralization and kept the blocksize low even at the cost of a community split.
Bitcoin maximalists will claim every other cryptocurrency is a scam, a shitcoin, a fraud, feeling vindicating every time a scam is exposed or an unstable network collapses.
Clearly Bitcoin maximalists promote themselves as the champions of decentralization always mentioning how mining is decentralized but avoid explaining how mining is always controlled by just two or three mining pools.
Moreover, in development terms Bitcoin is clearly controlled by a few developers afiliated with private company, Blockstream.
Makes us wonder why Bitcoin maximalists support the centralized stablecoin $USDT if their intentions are as pure as they want to make it seem.
Watch Max Keiser explaining Bitcoin
It is all about the price and the power derived from the price of Bitcoin. Max Keiser’s delusional speeches illustrate everything wrong with Bitcoin maximalism today.
The privileges of the early adopters matter more than the network itself. As the (late) infamous and deranged Bitcoin maximalist Mircea Popescu suggested to Andreas Antonopoulos in 2014:
How much do Bitcoin maximalists care about decentralization when they promote Tether? Bitcoin fans support a shady, centralized, dollar-pegged token operated by a group of people who lied about their reserves and falsified documents to create bank accounts.
What goes on is BTC maximalists want the price of BTC higher as it serves them well for the last part Max Keiser mentioned in the first video, which is to buy off politicians and senators and push a certain agenda.
Bitcoin maximalists purposedly diverted the path of adoption that would as P2P digital cash, and limited Bitcoin’s potential to mere speculation.
It is not just Max Keiser who openly advocates in favor of centralized tokens, though.
The support to Tether is the collective approach Bitcoin maximalist.
And they won’t just stop at Tether, but they support any centralized platform or custodial wallet that helps the price go up.
(Twitter)
While some of us were warning investors about the danger custodian service Celsius was posing, months before the platform paused withdrawals, maximalism patriarch Adam Back was confronting us sending out a conflicting message that had nothing to do with decentralization or the purpose of Bitcoin, yet one in support of a high-yield centralized scheme.
For Adam Back (and consequently every other maximalist) the sole reason Bitcoin exists is the price. Can we imagine any product serving absolutely no other purpose than speculation? Pyramid schemes.
(Twitter)
Maximalists deceive the public acting as champions of decentralization. Since Tether is a sponsor of Blockstream that’s all that matters. It prints billions out of thin air and pumps the price of BTC.
A business with a shady past an a future certain to wreck havoc in the cryptocurrency industry.
Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines. Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie
There is nothing left in Bitcoin (BTC) in 2023 but deception, a narrative that constantly changes according to circumstances, and irrelevant social media influencers you can’t be seriously following for financial advice.
In Conclusion: The BTC Facade Ends With Tether
(Twitter)
Tether minted another Billion USDT just like that.
Fake liquidity sustains Bitcoin at extreme valuation, empowering Bitcoin maximalists and nourishing the absurdity of this market.
Tether prints USDT and the price of BTC pumps.
Accounting firm BDO Italia releases attestations (ordered by Tether), validating for a single day every three months that Tether maintains equal reserves to the stablecoin it controls.
However, since this is not a full audit, these reserves are not analyzed further, and we have no idea about the money transfers or what these resources contain in detail.
Moreover, BDO emphasizes that it does not track Tether’s resources at any other time and does not certify cash flows or reserves for the rest of 90 days. There’s no balance sheet, so these attestations prove nothing.
Investigators have long sought to expose the accounting behind Tether, whose combined secrecy and enormity have earned it the reputation of “the coin that could wreck crypto.”
- Forbes
It would be incredible if one day we discover how we were all wrong regarding Tether, Bitfinex, the LEO token, the Panama papers, the USDT/BTC pumps, and several more discrepancies caused by secrecy and confusion (the public strategy of Tether).
The collapse of “unstablecoins” is not a matter of if but a matter of when.
Once USDT collapses, the market will decide where Bitcoin BTC belongs and how much of its current value is backed by actual funds, and not billions of random tokens minted in milliseconds.
Cover Picture on Pixabay (background)
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USDT is the most dodgy stable in history