How Bad Is The USDT/Tether Fraud, Really?

It's pretty f'ing bad. Tether will die a complete death here before too long.

Tether and BItfinex created 100 million usdt per day the last several days. Out of nothing.

In October they were doing 20-30 million new USDT per day. Out of nothing.

The 'out of nothing' wouldn't be so bad (because all crypto is coming from nothing), except that usdt is SUPPOSED to be backed by the US dollar.

Meaning, every USDT that gets created, Tether is SUPPOSED to be buying a USD.

But if they're not....then:

A. Much of the impetus of Bitcoin from $2,000/btc to MUCH higher prices was pushed by tether....somebody was buying a lot of bitcoin for exactly nothing.

B. USDT has no real value. It's certainly not worth $1.

C. If this known issue becomes a thing (right now people know about it but it hasn't affected the market nor caused concern/panic), then there will be concern and doubt about the 'real' value of the market, and price will drop. This could be a market wide phenomenon. Panic creates panic creates panic. Then the whales will jump on the panic and cause an even bigger sell off so they can buy at the bottom.

WHAT'S THE SAVING GRACE HERE?

That all sounds bad, right? Well, it is.

BUT! But the good news is, is that there's only about $1.7 billion in tether. Which is a drop in the bucket of the total crypto market.

So if tether were to 100% disappear this instant, just that wouldn't make much of a bump in the price.

BUT! That's not what there is to worry about. That's just the stone hitting the pond. What there is to worry about is the ripples that stone would cause.

Like....a sudden doubt about the true value of bitcoin. That would cause doubt at best and panic at worst. That would cause btc price to drop. Which would add credibility to the doubt/panic, which would cause the price to drop even more.....repeat.