Cryptocurrencies

[OngBonga]

Which stablecoins you guys using? I figured out I can use a deemed acquisition cost for taxation purposes, so trading is actually on the table.

I use tether USDT but I don't keep funds there, and it's only a matter of convenience. My crypto money is pretty much always either in a coin, or locked in order. I'd only be holding tether if I knew the markets were going to crash, and even then I'd be holding until I bought the dip rather than cashing anything out. idk about the 3% reserves problem that keith mentioned, it's beyond my grasp when we consider the liquidity is tied to non-stable coins too, but so long as everyone doesn't try to cash out their tether at the same time it shouldn't even be a problem. I think most people just hold the bulk of their tether for the purpose of trading at a later date.

[Keith]

I use tether USDT but I don't keep funds there, and it's only a matter of convenience.

Which is fine most of the time

My crypto money is pretty much always either in a coin, or locked in order. I'd only be holding tether if I knew the markets were going to crash,

This is where the problem starts to come in , by the time you get to know that the market is going to crash you will be creating huge demand along with everyone else who is selling expecting the crash as well. It's also likely that you wont get time to sell high.....i.e like last weeks dip .....did you sell at the peak and /or buy at the bottom ?

and even then I'd be holding until I bought the dip rather than cashing anything out.

When will you buy though ? What happens if its the end of the bull market and prices keep going down ?

idk about the 3% reserves problem that keith mentioned, it's beyond my grasp when we consider the liquidity is tied to non-stable coins too, but so long as everyone doesn't try to cash out their tether at the same time it shouldn't even be a problem. I think most people just hold the bulk of their tether for the purpose of trading at a later date.

this is the huge problem with that line of thinking .....

At the end of the bull market people will buy the dip , prices will bounce and peak lower but then crash lower and rinse and repeat. People will then stop buying the dip which will prevent the rallies and prices will keep going lower .

That is the stage where people will want to withdraw what they have left in crypto which will become a feedback loop , so that cash is removed from tether, tether has to realise the fiat currency to cash them out by selling their crypto holdings that have now reduced in value which puts further pressure on prices until they get into full tilt territory where people are asking to withdraw to fiat and they have no quickly realisable assets to pay the withdrawals.

Withdrawal times will become extended , this will be reported in the news channels and there will then be the bank run on tether with everyone trying to cash in there tether at the same time , i.e like happened in greece when they got into trouble and the rest of the central banks in europe put harsh limits on national spending in exchange for a bail out loan .


Saying you'll only worry about it when there's a crash is the time when its too late to do anything about it. Once the liquidity problems show up the tether will no longer be backed 1:1 for usd so it will no longer be a stable coin and the price of it will crash along with the value of the crypto that is forming the basis of its realisable assets. This will also impact your ability to buy at the bottom of the market with tether usdt as the usdt will only be worth a fraction of 1$ instead of 1$