Will this lead to a stock market crash or is it just another noise cycle?
Here's what history tells us about Tether's past FUDs and why it might surprise you this time around. A thread:🧵👇
2/ The cryptocurrency bull run has three things in common: a price rally alone, the crypto ban in China, and Tether FUD
It happened in 2017, in 2021 and is happening again this time.
As we know, USDT will be delisted from EU exchanges because it is not compliant with the new EU MiCA regulations.
3/ There is a lot of misinformation circulating that USDT is considered illegal in the EU, so let's clarify this first.
First of all, it will not be illegal to hold USDT in the EU
You can hold USDT in non-custodial wallets and even use it to trade on DEXs
The restriction is that you cannot use USDT to trade on MiCA compliant exchanges
4/ But Axel, what about USDT trading volume and depreciation?
USDT is the largest stablecoin, with a market cap of $138.5 billion and a daily trading volume of $44 billion.
To date, 80% of USDT trading volume comes from Asia, so the EU delisting will not have a serious impact.
5/ This is demonstrated by the market capitalization of USDT, which has only fallen by 1.2%, despite fears from major players regarding its peg.
Additionally, USDT has maintained its peg and continues to see higher trading volume than the top 10 cryptocurrencies combined.
Now the most important question arises: why can't USDT simply meet the MiCA requirements?
6/ It all depends on the profitability of USDT.
To be MiCA compliant, stablecoin reserves must be held with MiCA-approved custodians and banks.
This would gradually decrease Tether's profitability, as keeping reserves in EU banks would yield almost nothing.
Now that we've covered what's happening in the EU and why, let's look at Tether's past FUD.
7/➔ 1. Federal government investigates Tether:
On October 25, 2024, the Wall Street Journal reported that the federal government was investigating Tether for possible violations of sanctions and anti-money laundering rules.
This caused panic in the market, with BTC dropping $2,000 in minutes and altcoins dropping 5-10%.
Shortly after, Tether CEO called the news fake, and BTC began to rebound.
Since then, BTC has increased by nearly 43% and reached 62% at its peak.
8/➔ 2. The UN accuses the USDT:
On January 15, 2024, the UN released a paper calling USDT “the ultimate panacea for fraudsters.”
As expected, this led to a slight devaluation of USDT and BTC fell below the $40,000 mark.
However, over the next eight weeks, BTC surged nearly 85%, hitting a new all-time high, while altcoins gained 150-200%.
9/➔ 3. Competitors have tried to untie USDT:
On June 15, 2023, a coordinated attempt to untie USDT took place.
USDT briefly broke down, falling to 0.995, and BTC fell below $25,000.
As usual, this turned out to be the absolute pico bottom for BTC. Since then, BTC has surged by over 280%.
Another failed attempt and yet another great buying opportunity.
10/➔ 4. FTX bankruptcy took down USDT:
On November 10, 2022, USDT crashed, falling as low as $0.93.
BTC fell below $16,000, marking the bottom of the cycle.
Two years later, BTC is up nearly 500%, with many altcoins up 800-1,000%.
11/➔ 5. NYDFS criticizes Tether:
In December 2020, the NYDFS asked Tether to submit its financial documents amid rumors that USDT was not fully backed.
During this period, BTC fell by 10% and altcoins fell by 30%.
However, a few weeks later, the biggest bull run began. BTC jumped to $64,000, ETH hit $4,000, and altcoins increased 20-50x.
12➔ Conclusion :
Tether FUD means buying opportunity, and so does China ban FUD.
Interestingly, you will hear these FUDs either at the peak low or during the period of broad-based bullishness.
Do one thing, take screenshots of cryptocurrency prices today, then wait until February/March 2025; you will see most of them trading much higher than their current levels.
Additionally, USDT will still be the#1stablecoin, and people will continue to demand its demise, something they have been demanding for 7 years.
