Is Tether a black swan?

  • How would a loss of confidence in Tether play out in the short term?
  • Who would get most rekt if a Tether-related crash happens?
  • Would a Tether confidence crisis be a black swan event* that would severely impact the market?

1. The shape of US dollar liquidity in the crypto markets

The stable coin landscape

Stablecoin market share. Total supply is 106B, TheBlockCrypto. Also, pie charts are awesome

The rest of the pack

FTX separates USD tokens into USD and stable coins (includes USDC and BUSD) and USDT
USDC/USDT Order books on Binance and Digifinex, LiveCoinWatch on June 17th, 2021

Fiat liquidity


Mechanics of the Tether peg

Why Tether’s peg is fragile

Tether TOS: Tether can delay redemptions or redeem securities and other assets instead (not USD).

3. “This is good for Bitcoin”

A severe case of ngmi

When liquidity evaporates

Quote: JPM Bitcoin Report, February 2021, page 6
Credit: W O J A K

4. How USDT issuance works

Hypothetical money printer
Alex Mashinsky spilling the beans on Twitter
The motto of the cryptocurrency market with respect to Tether

5. The casino always wins

6. Conclusion

7. Data Sources




Hackers (1994) fan • Aspiring composer • Angel Investor • Art Collector • P(G(F)) = ∀y q(y, G(F))

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Bernhard Mueller

Bernhard Mueller

Hackers (1994) fan • Aspiring composer • Angel Investor • Art Collector • P(G(F)) = ∀y q(y, G(F))

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