Bitcoin (BTC), as a cryptoasset, is tethered to tether (USDT) tightly. Ever since becoming tradable in 2015, USDT has come to occupy an increasingly important part of the bitcoin and wider cryptocurrency ecosystem.
Now, USDT is the third-biggest token by market capitalization, and by virtue of being pegged 1:1 to the US dollar, it has long provided an on-ramp and safe haven for millions of traders.
But with Tether already facing legal actions, what would happen to BTC and its price if it were to cease operations? Moreover, even some analysts warned recently that Tether and other stablecoins may face an uncertain future as governments step up their regulatory scrutiny of the sector.
According to industry players speaking with Cryptonews.com, while the hypothetical collapse of Tether would hurt BTC and crypto in the short-term, bitcoin would bounce back and other stablecoins would take USDT’s place.
‘Regulators go slowly’
Tether has attracted controversy from much of the media. It has also attracted the attention of financial regulators, something which could be very ominous for the stablecoin, and for crypto.
“So far, the only regulator taking action is the New York Attorney General – but the US Commodity Futures Trading Commission (CFTC) has subpoenaed information from iFinex, [the operator of Tether,] before,” said David Gerard, noted cryptocurrency skeptic and the