> Crash happens, like we have seen, but everyone cashing out their USDT is not a scenario going to happen.
This seems wildly optimistic. All it would take is for users to adopt some new FOTM stablecoin faster than Tether backers can liquidate their reserves. It needn't be rational, either; it could be catalyzed by, let's say, a *ism scandal involving someone connected to Tether.
Without commenting on the likelihood of a tether bank run in general, it seems incredibly unlikely that it'll be catalyzed by an *ism scandal purely based on the general political leanings of crypto whales (hard to pin down on the left-right spectrum, but definitely highly libertarian for obvious reasons).
> but everyone cashing out their USDT is not a scenario going to happen
Didn't bankers say something similar in 1928?
If I recall correctly, the stock market _only_ lost 90% of its value during the crash that proceeded the Great Depression.
It would be more relevant to compare to bank runs. How many banks got only 90% of their deposits withdrawn and managed to go through this?
Correct. Finex may have started out on shaky ground, but now passed a NYAG lawsuit and is working to become more legit. Even the CEO is out in public now doing podcasts and he never used to be. The only way USDT fails now is a concerted attack, likely by a government, thru some mix of disinformation, lawsuits and new laws.
Tip of the iceberg https://bitinfocharts.com/bitcoin/wallet/Bitfinex-coldwallet
Also, you're going with the assumption they shall be able to redeem 100%. Crash happens, like we have seen, but everyone cashing out their USDT is not a scenario going to happen. Or if you want to account for this scenario, then you can as well assume that crypto is going to disappear, and that would not happen without a cataclysmic event in the stock market either. Probably we will be back to the stone age at this point, and will have other things to worry about