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If USDT collapses, what impact will it have on Bitcoin?

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If USDT collapses, what impact will it have on Bitcoin?

Cryptocurrency analyst Alex Kruger recently conducted a poll on Twitter, asking the crypto community to vote on whether the collapse of USDT would impact the price of Bitcoin. The results showed a significant division of opinions within the crypto community on this issue.

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The survey asked the crypto community: what will happen to the price of Bitcoin if Tether USDT collapses? The results are as follows:

  • 38% believe it will likely trigger a temporary 10-40% drop.
  • 24% think Bitcoin will actually rise.
  • 23% believe it will be a disaster and hit a new low.
  • 15% think Bitcoin will rise first, then fall.

According to a report, a total of 3,619 users voted in the survey.

Only 22% believe that Tether's collapse would be doomsday for Bitcoin. However, there are also opposing views that users will convert a large amount of USDT to Bitcoin, leading to a significant price increase.

However, as mentioned by a user's comment, the impact of a future Tether collapse may not be significant. Currently, the crypto market has issued many other stablecoins, meaning funds held in Tether will flow into other stablecoins.

Previous USDT Drop Below $1, Bitcoin Rises

Looking back at October 2018, when Tether and its partner Noble Bank terminated their cooperation, causing USDT to devalue against the US dollar. Its trading price dropped to $0.90 and triggered panic in the market.

Despite this, the price of Bitcoin was hardly affected. In fact, the price increased from $6,450 on October 3, 2018, to $6,600 on October 6, 2018.

Although there are not many precedents, the historical trend of Bitcoin may indicate that it can survive independently in any crisis related to Tether. In addition, in the event of a crisis with USDT, investors are more likely to move funds to Bitcoin.

On the other hand, the issuance of Tether has often been accused of being a means to manipulate the price of Bitcoin. Previous reports have claimed that the 2017 Bitcoin bull market was caused by price manipulation by a single account on Bitfinex and criticized Tether for over-issuing USDT without 100% reserve backing.

Further Reading

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  • Energy technology launches blockchain applications in southern Australia

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