I dont like to spread fat, so fear, uncertainty and doubts, but we have to look the truth in the eye and the truth is shown in this chart. This is tether usdt. The largest stablecoin, we all know about the deep pegging of ust right, but ust was relatively small in the grand scheme of things. It was around 1 of all of cryptos market cap still significant and obviously still having an impact on bitcoin right. Bitcoin fell below 30k, but if this deep packs, if tether depicts, we will see something completely different, the tethered dominance or the measure of how much percent of all of crypto is in tether has been rising. It started out relatively small right in june 2018. It was less than a percent; now it is seven percent of all of crypto is in tether. Now. Why is this starting to the pack? Could this revert? Of course it could right. This was a way smaller, deep, pegging event than with ust, but with ust. It also started this way, so we have to take this seriously. This is not yet at one dollar. There are several reasons why this is probably depending right now. The first reason is its very likely at least thats my opinion, its very likely that there will be more regulation coming especially around stable coins. Stable coins and d5 in general was always looked at with a suspicious eye by the governments. Now that ust is imploding and has taken away so many billions of investors money, i think, its more than reasonable to assume that regulation will come and that the weaker stable coins might get a hard time now.

How could this look like in practice? Maybe the centralized exchanges they wont be allowed anymore to deal with tether. Why specifically tether and not lets, say usdc or die thats, because tether claims things that they couldnt yet back up right. There are funny numbers on the website, but what is tether really backed by its mainly commercial paper, and nobody knows what that commercial paper is. There are already rumors that some of that commercial paper might have been evergrand right: the large property developer in china. That then, subsequently collapsed. It might even just be promises by the centralized exchanges right. Maybe the centralized exchanges just say: okay here is a debt paper. Please give us some tether and maybe thats the reason why theres so much adoption of tether when you look outside of the centralized exchanges right, you just look at defy at pure defy most applications. They prefer to pool their token with usdc, for example, because it is safer, but once you trade on centralized exchanges, the game changes tether is way more important. And why is that? Well, we can have all kinds of different conspiracy theories right, but probably in some form or another, the centralized exchanges do get a better deal converting us dollars into tether then into something else and thats. Probably the main fundamental reason why regulators are going to ask more and more questions at least thats. My take on this. The problem, though, is if tether, really definitely deep packs like ust did, then this will have all kinds of knock on effects.

Centralized exchanges might get bust, we might relive another mount gox. This will imply all kinds of deleveraging events which then obviously leads to the entire crypto market imploding and bitcoin going really really low. So i really dont want this to happen. Nobody wants this to happen and we have seen larger fluctuations in the past, but at that time tether was way way smaller and thats. The same problem with ust ust was able to regain its pack because it was way smaller in the early days, then, once it reached a certain size, then you need so much capital to drive the price back up that you cant really find anybody that can support This tether is way way larger its roughly seven to eight times larger than ust. Now, what do i do in this situation? Theres only so much protection. You can do right. Of course, you could entirely exit everything and be super cautious and say: okay, ive had enough im just staying in fiat now, but its just one scenario that could play out. That probably also has a relatively low likelihood, but the problem is in the case that this does play out. The ramifications are massive, and so what im doing is im, obviously not holding any tether coins right? I rather hold die or usdc. I guess thats, relatively speaking at least somewhat safer im, also in order to get a bit of a protection borrowing, some tether, so ive deposited collateral on the borrowing and lending platform such as rv, for example, and then ive borrowed tether against this and ive bought another Stable coin with those proceeds, so ive swapped im effectively short tether.

Now this does cost a little bit right. Youve got maybe one or two percent net financing costs from this right. You receive less in return from depositing that other stablecoin, then you pay for borrowing tether, but the delta isnt that much its maybe two or three percent per annum. But i think, given this chart here and given the regulatory influence that might now hit the crypto space after this entire ust implosion, i think its better to be too cautious and rather be an early mover than too confident. You really never know, and the probability of a d pack is probably now higher than two percent, maybe its ten percent, maybe its fifteen percent thats, probably not higher than fifty percent. So i dont think theres reason to be completely alarmist about the current situation, but still it does make sense to be at least a little bit head to not completely entirely eradicate the portfolio and thats what im doing with that tether shot. Now, if you want to do the same and youre not yet sure how to actually set something like this up, i have done a tutorial video here for the premium members, so the bitcoin strategy premium membership. It is open for subscription. The link to that is in the video description. Of course. I also continue to publish free videos here on youtube, so if you havent yet subscribed feel free to do so. If youre wondering whether or not it makes sense now to buy luna since luna has come down that much already then feel free to check out this video over here theres a lot of value over there.