Today, Monday the 15th of October, gave us a glimpse of what would happen if the actual United States Dollar lost value due to a possible stock market crash as everyone has been talking about. This global financial crisis, has been predicted by many, to occur sometime before 2021. But today, the cryptocurrency that was falling like a rock, was none other than Tether (USDT). Tether is pegged to the USD and in a sense it provided a real simulation of the events that would follow, were the real Dollar to crash as predicted.
Genesis of the Panic
Initially what turned out to be an innocent notification by KuCoin to suspend deposits and withdrawals of Tether (USDT) on the exchange, resulted in market chaos where the fake news spread that Binance was about to delist the stable coin. Many traders on the various social media platforms got the following screenshot that was evidently fake.
Observant traders realized that the team at Binance could not use such direct words to describe Tether as a scam. What then resulted, is the conclusion that it was all fake news.
Traders Buy XRP, XLM and TRX
The natural thing that many traders did, was to liquidate their Tether (USDT) holdings by buying Bitcoin (BTC) in an instant. This in turn resulted in the King of Crypto peaking at around $7,600 on Binance.
As soon as BTC had crossed the $6,800 mark, some traders realized that Bitcoin was pumping hard and that there were other affordable coins they could buy to run away from the turmoil that was the implosion of Tether.
The natural choice for many, were the cryptocurrencies in the top 20 according to market capitalization. These included XRP, Stellar (XLM) and Tron (TRX). The latter digital asset, has extra exciting surrounding it due to a pending partnership announcement from the Tron Foundation. Partnership news usually equate to a coin experiencing massive gains in the crypto markets and many do not want to miss out.
Lessons Learnt and Conclusions
The lessons that were learnt today, and conclusions of the market chaos witnessed today can be summarized as follows:
- There is a deep fear amongst the crypto-community that Tether (USDT) might not be backed by actual USD currency
- Sporadic suggestions to do away with all stable coins due to the fact that traders run to them for safety rather than just toughing it out during volatile times
- The funds (USDT and fiat) that were injected into BTC and Alts showed that without stable coins, crypto trading would be more exciting and probably make Bitcoin thrive to greater heights
- The top 20 cryptocurrencies are viewed as the safest options to turn to during a possible Tether implosion
- Sentiments of a pending alt-coin season have started to spread in the crypto community
- IF the US Stock market were to crash, there is a high probability crypto would thrive with Bitcoin leading the way
What are your thoughts about the Tether situation that happened early Monday morning? Were you affected? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any opinion herein is purely the author’s and does not represent the opinion of Crypto Crimson or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.