However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.
Still, it needs to happen. Keeping Tether alive is the worst thing that can happen to crypto.
Exactly. The next big crypto crash is waiting to happen. Will probably come from the debt ceiling crisis with the US then cracking down on Tether afterwards with the US government also collecting unrealised capital gains taxes; enough to scare the hands out of lots of investors.
Tether knows they are a scam. So they are getting out while they can.
FTX and Binance among biggest customers. Likely offering commercial paper to Tether in exchange for the USDT. Already established that Tether made crypto backed USDT loans to Celsius.
Here’s Tether’s customers:
https://protos.com/tether-papers-crypto-stablecoin-usdt-inve...
On the other hand, the market cap is 75B, while ETH is 488B and BTC is 919B. So the impact maybe wouldn't be too drastic and too long lasting.
I wonder if it's worth converting USDC and DAI loans to USDT, would be easier to repay if it did crash..
70% of the crypto volume is in USDT.
From 2020 (should still hold): https://coingape.com/tether-dominates-exchange-trading-with-...
If Tether collapses, so does USDT. If exchanges have majority of their volume in USDT pairs, then the market liquidity dries up and the whole thing collapse. Remember that those coins need to be cashed out for actual USD. But if that USD does not actually exist, what will you sell into?