I am confused, we are discussing US "banning" USDT in the US, but mention DeFi (no jurisdiction, not US) and exchanges that use mostly USDT pairs (not US) I just looked at Coinbase, USD is the top pair on the trading volume for the top 7 spots, What US exchanges utilize stablecoin (USDT) for most of its trading pair? No drop in volume since USDT is not a top trading pair on US exchanges, and no redemptions, the only time USDT had big redemptions was during the bear market 2022 when a coordinated efforts between Circle, a few exchanges, hedge funds, tried to depeg USDT by redeeming $20B within a week which Tether did not have any problems whatsoever so the attack failed Lutnick spoke about this on an interview, I'd post it again if you didn't see it when I posted it Remember only accredited individuals can redeem USDT for fiat from Tether or big institutions, and most of the USDT holders are neither, over 80% of USDT in circulation are in wallets or smartcontract platforms defi less than 10% of USDT are on exchanges which is why everyone knew the Tether attack in 2022 was coordinated, the amount of redemption never happened before or since and Tether has since grown from 60B to 144B Banks are afraid of unintended consequences or opening a Pandora's box if $100B of deposits at a major US bank within a short time wanted to convert/purchase the stablecoin 1-to-1 backing (supposedly, lol), the bank would collapse due to duration mismatch, remember FDIC, bank collapses in 2023? It would be a banking crisis and contagion you could not imagine, 2008 would be child's play
Ah, ok then. So this is perhaps something I wasn't aware of. When I used KuCoin briefly for example, everything there was a pair with USDT, but perhaps KuCoin isn't allowed in the US, so this wouldn't matter. If most US regulated exchanges have USD as the trading pair, then Tether exiting the US market wouldn't be a problem at all. I just assumed that most trading volume was with USDT, and that a large percentage of that was within the US. If in fact this trading volume is outside of the US, then none of my points make sense. I guess it all comes down to what the rules would be for a US bank issued stablecoin. Since those deposits are currently backed by the long duration bonds, and hence most of your money can't really be redeemed, if the bank issued stablecoin could also be backed by long duration bonds, then there wouldn't be a problem. But if this bill requires only highly liquid assets, then I can absolutely see your point. By offering a stablecoin, the bank is essentially creating the scenario for a bankrun. I still don't see though how all of these stablecoins will survive. If you have a JPM coin, would it be accepted as a deposit at Bank of America? And would a BoA coin be also universally accepted elsewhere? I imagine most people would only use the stablecoin that has the widest adoption, unless of course the banks pass through juicy interest payments as incentive to hold and use their coin, even if it meant less global adoption. This bill will be super interesting and have a huge impact on the crypto market going forward.
RedDuke talks about 70% of trading volume is with usdt, but does not explain why It's because it's global trading, for the longest time, Binance was doing 10x trading volume than Coinbase the biggest US crypto exchange Even today, looking at Tether trading volume, number 1 is Binance (no surprise) number 2 is Binance (no surprise), 3 is ByBit, 4 is Crypto.com (Singapore-based), 5 is OKX, you know where Coinbase is? Number 55, I couldn't even find Kraken and Gemini As you know, Eurodollars is over 15 Trillion, no one really knows how much and why is this relevant? So, if a crypto trader in Dubai wishes to trade some crypto assets at Binance for fiat stability, do they want Dubai currency or USD king of fiat currency? Of course they want USDT Same with the Thai crypto trader, same with Indonesian crypto trader, same with any other non-US crypto trader, they all want USD fiat, and the best they can do is USDT, If they could do Eurodollars, maybe, but Binance is not going to establish usd banking rails to all these countries, and neither would any of the 50 exchanges ahead of Coinbase in USDT trading volume https://www.coingecko.com/en/coins/tether (go to markets section) Besides the long duration bonds, the other problem is the 30x leverage for every deposit, they lend out 30x that, so a 10% move from deposits to their new product offering stablecoin would bankrupt them That's just TradFi eating TradFi, USD bank deposit, going from antiquated, 9-5 hours, 5 business days, no access on holidays to 24/7/365, penny transfers between any bank universal transfers, no holidays, instant transfers anytime The old banking system would collapse as everyone would prefer the latter issued by the same banks who would give up all the fees generated by the antiquated system running on cobol What the banks want is bitcoin, the asset, to hold in their balance sheet as an asset, as it grows in value to $1M/btc to $10M/btc in the next 15 years, imagine how much lending capacity creating new money they can do with that But back to stablecoin, they want the USDT business, free money deposits that never get withdrawn only funds keep coming in, but they know it's dangerous as it could cannibalize their existing deposits A conundrum, they are trying to solve through US legal system and regulations as USDT keeps eating up Eurodolalrs market by the billions of $, 10's of billions of $ and soon, by the $100's of billions of $ and Trillions of $ in the future
This is all super interesting. So in a way, the US found a way for foreign buyers to buy US treasuries again! ... You keep reading about how central banks of China and other countries are buying less, but it seems like if most of USDT is held and traded outside of US, its the foreigners again that are responsible for the buying, but not central banks, but rather, individuals. I honestly didn't realize that there appears to be so little USDT held/used on US soil. This is the part that worries me. If we get on a fractional reserve banking system again that is underpinned by Bitcoin, its better than it being on fiat, but the fractional part is worrisome. We take a hard cap of 21 million coins, and against that, create immense amount of US dollars. So then you have to wonder, how much bitcoin would be enough to offset billions, hundreds of billions, of created dollars? I have to think through this. This is very true, and that flight risk is huge. I first learned about this from Caitlyn Long a couple of years ago where she talked about Signature or Silvergate, one of those two banks, that suffered massive withdrawls in only days. This exact same thing would happen, as you point out, to the "Too Big To Fail" or GSIB US banks.
Ethereum's price movements have been wild, and breaking past $10K seems like a real possibility, especially with growing institutional interest and Layer 2 scaling developments. If ETH staking and DeFi adoption keep surging, we might see that target sooner than expected. For those holding or trading ETH, having a secure and flexible wallet is key. Platforms like CEX IO Wallet make it easy to store, send, and receive ETH while staying connected to the market. Whether you're in it for the long haul or just looking for an easy way to manage your assets, it's good to have a trusted option. What’s your timeline for ETH hitting $10K? Thinking 2025, or do you see it happening sooner?
Fractional reserve lending of Bitcoin already exists! https://www.perplexity.ai/search/can-more-bitcoin-be-lent-than-MhuXB6LVR1y70jLkiGIKSw
You hit on why bitcoin will go to tens of millions of $ per bitcoin, First of all, a lot of people here do not believe me when I say bitcoin price will be $1M each within 5 years, and that's not even the top of bitcoin, the price will keep going up Bitcoin will be $10M each within 15 years, and they say impossible, but bitcoin is already 12M/btc in Japanese Yen When bitcoin first came out with a value, 10,000 btc for 2 papajohn pizzas, bitcoin was less than 1 Japanese Yen, today, 1 bitcoin is 12M JPY 10,000 bitcoin back then for $30 worth of pizzas was pricing bitcoin at less than 1 US cent per bitcoin, a month ago 10,000 bitcoin was worth over $1B And people think $1M per bitcoin within 5 years is not possible, come on now, who's delusional, the believers or the non-believers? the mind cannot comprehend how extremely undervalued the best money in the history of the world is ----------- So, let's get back to fractional reserve banking using bitcoin as the collateral asset, the most pristine collateral asset in the world Banks have a major problem, all their assets are fiat assets, and when there's a problem, they just bail out using fiat complexities, think of UK Gilt, think of financial system crises in 2008, think of US banking system crises in 2023 They just create more, or rig the system so there are no sellers, similar to GME short squeeze, only sellers allowed, no buyers allowed, similar to LME, when you win, they change the rules so you lose Banks hold assets that are not very liquid like real estate mortgage backed securities, they know it's junk, but they have to put on their books that it's worth very high, as long as they all hold and not sell, no one panics What they need is bitcoin as collateral asset, re-classify it as currency, they can lend 30 to 1 on its value, $10M/bitcoin, they can can lend $300M against a 1 bitcoin deposit, they will pay you to deposit your 1 bitcoin and borrow $1M against it, you don't pay interest on the loan, they pay you interest, a negative interest rate because they can lend against your bitcoin 30x the value and earn much more than 5% interest they are paying you And no, bitcoin can stay 21M and deflationary, the price will just have to go up very high, problem solved, just like Manhattan real estate was very cheap 100 years ago, today they did not make more Manhattan real estate but the price has skyrocketed and now used as a collateral asset,
This is such a stupid argument that we can't take you seriously for the rest of the post. Also bitcoin isn't really money or can't function as such no matter how you classify it. Here is what could happen though: 1. There is a fairly quick run up when price goes vertical and it gains 50-100+%, caused by some kind of unpredictable news. That is going to be be followed by an immediate collapse of 50+% and price never goingclose again to its ATH. Then for years it just keeps getting stuck to the market and moving in tandem with it, and people slowly switching to something else flavour of the month. 2. The opposite of this: Some eventually foreseen but untimable negative news coming out and price drops a decent 30-50% never going to reach the current ATH again. People eventually switch to something else and crypto just lingers around. This scenario is also more likely because we have been due a market crash and whereever the market goes, there goes crypto 2-3 times more. What is NOT gonna happen: price relative slowly but steadily gaining year by year a decent amount and keep going on forever.
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