That means that if you had owned a million dollars worth of luna just a couple of weeks ago, right now, that would be worth about 1 000. It turns out that the ust stable coin is not so stable at all, and it has not regained its peg. In days, and currently its sitting at a value of about 55 cents, which is 45 off where it needs to be now prior to this months, back even years back, all of the attention on deregulated, stable coins that might blow up and destroy the entire crypto market Was given to tether usdt, i personally made a video about tether about eight months ago bringing awareness to the danger of that stable coin, because, in short, its a giant fraud. Now, just because ust was the first to blow up, doesnt mean that the tether risk is negligible or non existent and in fact its actually got worse now. The real problem here is that stable coins are needed and tether is the biggest stable coin. It provides huge amounts of liquidity to the markets right now about 86 billion dollars worth the best. Prices in crypto are offered from usdt trading pairs, and so, if the peg breaks for tether like it did for ust, there will probably be about a 120 billion liquidity gap for the markets. That would have just dried up over the course of a few days. If this happens its very very simple markets, the crypto markets will not be able to function properly and the prices of all cryptocurrencies will crash.

We are already seeing some of this happen with crypto because of the ust collapse. The entire market is down about 20. On a minimum basis, over the last 24 hours and the day before that it saw similar results, bitcoin fell and touched 26 000, the lowest its seen in years. Ethereum touched sixteen hundred dollars again. The lowest weve seen it in years. Ada was at 40 cents and solana at forty dollars to say that theres, a bloodbath in the crypto markets right now is not at all an understatement. Now, as of right now, tether has broken its peg and it has not regained it yet if it continues to sustain this broken peg for a long period. One of two things will happen. The first is that there will be a large, profitable arbitrage opportunity. Basically, people can go onto exchanges and buy lots of usdt or tether and then go to the company that actually created usdt, which we also call tether and exchange those coins for us dollars and all will be well and those people will make a profit. The problem is, though, that tether is not fully backed and when they run out of money. Those people who buy usdt and then go to tether to try and exchange it for real dollars will be told that no, they arent allowed to do that, and the value of tether will instantly drop to zero on a real basis and well basically see that crypto Market collapse now, every time the tether breaks its peg, and this has happened in the past this isnt the first time.

This process occurs, arbitrage traders get into the markets and they make some profits, but up until now, and including now at this point, it hasnt developed to a situation where tether can no longer actually pay out whats needed. For now, things are okay, but tether cannot pay out forever because, as i said earlier, it isnt fully backed, and so eventually a bank run will occur, its just inevitable. Now the basic idea here is pretty simple as well. Stable coins should keep one us dollar in a bank for every stable coin that they print, but tether doesnt do this, despite the fact that they claimed to do it for a very long time. The company was actually convicted of fraud by the us department of justice and forced to pay millions of dollars in fines purely for lying about this. Its very simple tether is not backed by us dollars now in todays terms, though they dont even claim that its backed by dollars, they claim that its backed by either dollars loans or bonds, but this really isnt much better. The truth is that tether has, for years now tried to profit off of these billion dollar markets that they have. They sought to do that by taking out relatively low risk investments on things like bonds, so theyd get a return and cover their costs. The problem is, though, that tether resorted to risky debt and probably almost definitely really uses chinese cp or commercial papers, basically bonds from chinese companies.

Now what is the biggest chinese bond market? Well, it is, of course, the property sector in china that same property sector that has been collapsing in value with prices falling by about one percent or more every single month for over a year. Now, to say that the chinese property market is a bubble, is a huge understatement and its already started to crash, but thats not really what were talking about today. What is relevant for us, though, is that the bond prices of these chinese property developers have been collapsing too, and that is almost definitely what tether is backing their dollars with. Just how far are these bond prices down by well in many cases 30 or more – and this means that tether is almost definitely not backed, because if it were backed tether would publicly audit themselves. They would open up their books and they would reveal to the world exactly how much money theyre holding what bonds theyre holding what treasuries or anything like that and the fact that theyre not doing that means that they are definitely hiding something now. This is probably the worlds largest ongoing fraud and its very well known everyone knows about it. At this point i made a video about it last september, almost a year ago explaining the risk and for the most part we just get ignored. People continue to use tether. Many people like myself, though, are determined to make sure that no one is unaware of the risk that is posed by that dangerous stable coin.

For about five months. Ive finished every single video on this channel with the phrase make sure not to use tether, because the risk is just so huge. So please, if you do nothing else from this video, just follow that advice now as of right now, usdt is trading at about 98 cents on the dollar, two percent away from where it should be a few hours ago. It was trading at 95 cents, but it has still yet to regain that peg, and that is a dangerous thing. The question on everyones minds, then, is: will tether actually stabilize, and the answer is probably at least for a time, but it will not last forever frauds and ponzi schemes like this, especially on this kind of scale, always end. Eventually, a saying from michael bowie comes to mind at this point in time. Everyone says hes mad for thinking. Crypto is full of fraud and a bubble, but the reality is hes right. He likes to say that he might be early, but he isnt wrong. Really. We should all be very careful, especially right now. This ust and luna chaos has exposed just how dangerous this market is, how people can lose millions of dollars. Their entire life savings overnight only invest in crypto. What you can afford to lose dont be greedy and dont. Expect it to only go up as of right now, at the time of me, making this video the crypto market, has lost something like half a trillion dollars of value over the last month, and most of that has come over the last three days.

The risk is very, very real. Now i will be putting together a full length in depth, video explaining everything about luna and ust, but for now, though, what is the update on what happened over the last 24 hours? Well, luna fell another 99 in price. Anyone who bought any of those dips lost all of their money. Now there is a plan to save luna and ust, but it requires printing ridiculous amounts of luna to boost the price of ust to get it pegged down again, but theres, just hardly any value in luna left anymore. The market cap is tiny at just a few hundred million dollars, so the capital just isnt there to save ust with a market cap of 18 billion dollars. So far, the supply of luna has increased by almost 10 times and its going to increase by another 10 times again. That means that the price of luna is going to continue to crash and holders are going to continue to get burnt. Frankly, my rather cynical point of view on this all is that luna is dead, its gone its in the past its like bitconnect. We should wipe it from our minds and accept that it was a failed experiment if they are able to get ust to regain that peg then brilliant. Maybe they can continue for a few months, but the fundamentals of the coin and the protocol havent changed. They are in the exact same position as they were when this crash happened so theres, nothing to stop the crash from happening again now, if you enjoyed this video, then make sure to like comment and subscribe to bless the youtube algorithm.

If you want more content like this, then check out our patreon and join our community of investors, you get access to our discord, server and exclusive content like insights into my portfolio and buy and sell alerts for all. My own investments, of course, make sure to check out the link in the description to masterworks. It can help you protect your portfolio against market turmoil through fractional shares of art from world famous artists like banksy art has historically proven to be uncorrelated to the markets, so its a really valuable resource with the markets crypto and stocks falling every week. Theres also a link in the description to block five, which will give you up to 250 in free bitcoin. When you use it, you can also get interest on your crypto, so its earning you money while it just sits there.

https://www.youtube.com/watch?v=ymqYvAL6rKc