Bitcoin could trigger financial meltdown, warns Bank of England

Re:Bitcoin could trigger financial meltdown, warns Bank of E... by ur-whale on Thursday October 14, 2021 @09:30AM (#28863971)

> There are ways to hedge against the tether time bomb

Care to elaborate? Genuinely interested in those.

WRT Tether, when (not if) it implodes, it's actually unclear that effect it'll have on BTCUSD.

Short term, I think it'll lead to a huge price surge (USDT holders will rush for BTC/ETH as a bridge to get out).

Mid term, I believe it'll bring BTCUSD down by a fair bit (likely a 10x hit).

Long term, BTCUSD will be back to its unstoppable ratchet up.

[ Parent | on HN ]

Re:Bitcoin could trigger financial meltdown, warns Bank of E... by gunshai on Thursday October 14, 2021 @11:03AM (#28865260)

Short answer is algorithmically pegged stable coins.

See UST from Luna as an example.

The reason I like this idea is that it encourages behavior like people arbitraging the peg and they provide a service to keep it that way.

Here is a post mortem on the big crash back in the beginning of the summer and how it affected the UST algo stable coin.

To me this was quite confidence inspiring, that even while the peg came off more than other stables it snapped right back.

[ Parent | on HN ]

Re:Bitcoin could trigger financial meltdown, warns Bank of E... by ur-whale on Thursday October 14, 2021 @11:15AM (#28865451)

Thank you, haven't heard of those yet, will dig in.

[ Parent | on HN ]