The fear around Tether seemed somewhat justified at first.
A quazi security supposedly backed by the dollar supporting bitcoin prices by being printed at will seemed like some potentially very bad news just waiting to tank the cryptocurrency markets.
Even if it was "only" a $2 billion market compared to a $500 billion market.
Tether had wormed it's way onto many exchanges, specifically those that didn't have fiat on/off ramps.
It made the perfect dollar substitute for traders and investors to hide out in.
Why so much fear?
The fact that it had made its way onto so many exchanges and was being so frequently used across many different exchanges only stoked those fears.
Fears of contagion.
There was also the fear that the exchange most involved with Tether, Bitfinex, might become insolvent and it is one of the biggest crypto exchanges in the world.
Given all that, I think this one tweet put out by the Upbit exchange pretty much sums up why the Tether situation is not nearly as big of a deal as many people think:
(Source:
)https://twitter.com/CryptoOfKorea/status/961087459093307393
- CryptoOfKorea
That's right, Upbit announced that they will cover any losses that could come up due to the Tether situation.
So, even if Tether blows up, and every single Tether is fraudulent, Upbit announced that they will cover any and all losses due to Tether!
That is huge news and sets a great precedent going forward.
Upbit is able to do this because of how insanely profitable they and other cryptocurrency exchanges have been this year.
If other exchanges follow their lead, it would basically make this Tether situation meaningless, whether there was wrong doing or not.
It would have almost no effect on the cryptocurrency markets because everything would be backed.
Which means, if more exchanges make announcements like this, any sell off that was related to Tether will probably reverse itself in the coming days.