Weiss Ratings: Tether poses a serious threat to the cryptocurrency market [￼↻70%]
Independent rating Agency Weiss Ratings has warned investors and traders about the systematic risk to the cryptocurrency ecosystem, which is borne by the tokenized dollars Tether (USDT). According to the report, the potential collapse of USDT may adversely affect the entire market of digital assets.
"The biggest problem: the audit has never been conducted, and tether employees always shy away from the relevant issues. They constantly claim that their tokens are 100% backed by dollars, but never provided any evidence," said an analyst with Weiss Ratings Juan Villaverde.
According to him, the daily trading volume of USDT tokens regularly exceeds their market capitalization (according to CoinMarketCap, this situation developed at the time of publication). This means that the entire volume of tokens is sold and purchased in one day.
"If you look at the reviews on the Internet, most users agree that in fact Tether has launched a fractional backup system. In other words, the company DOESN't have all these dollars to back up tokens in full. I'd rather agree with that. It's all too suspicious," he added Villaverde.
He notes that USDT is used on many cryptocurrency exchanges that do not work with Fiat pairs as a "dollar substitute". Given such a high turnover, the analyst calls tokens one of the main sources of liquidity in the cryptocurrency market.
At the same time, Villaverde believes that USDT poses a serious threat to the ecosystem. If the tokens eventually turn out to be fraudulent or the government of any major country recognizes the use of USDT on exchanges as illegal circumvention of regulation, then "all this liquidity will simply evaporate."
According to Villaverde, with this development of the situation, many exchanges can simply "fail". In addition, investors will begin to massively sell digital assets, resulting in a drop in the price of the vast majority of cryptocurrencies. Nevertheless, such a crisis " will bring to the clean water all the machinations that previously remained unnoticed."
To protect yourself, Villaverde advises investors to buy a top cryptocurrency list from Weiss ratings. In addition, the analyst strongly recommends not to store digital assets on exchanges (especially if Tether is in their listing) and never trade in pairs with USDT.
In conclusion, Villaverde added that various problematic situations have happened in the past and will happen in the future. In his opinion, the main thing for investors is not to give in to panic.