By Paul Wilson, Chairman at IFA Magazine
On Friday the 13th of October 1307 The Knights Templar woke up to a business as usual day….but the horsemen of fate arrived that day signalling the end of a meteoric rise in power and wealth for some, to be replaced with utter ruin.
So who are to be “the unlucky for some’ this Friday the 13th? and will that affect IFA and DFM clients?
At the risk of creating a hostage to fortune first thing in the day, can we point you to look at Tether, the crypto currency stable coin today. This is the stable coin that is most popular as a medium of exchange to bridge transactions between currency from the real world like the USD and the wildly fluctuating crypto currencies such as Bitcoin.
In theory each ‘tether’ unit is backed by one USD in real assets so a Tether is pegged to one US dollar in value and so it is used as the medium of exchange currency when buying and selling your crypto.The Crypto Exchanges reply on stable coins to be able to trade smoothly.
It has long been suspected that there is something very wrong with Tether and there is a serious lack of transparency about the exact nature of the supposed 80 Billion USD assets said to back the currency. There is a huge potential for the uncovering of a blackhole in its finances. Yesterday, the 12th of May, the market called Tethers bluff with a selloff that pulled Tether away from its one to one peg with the dollar to a discount of almost 5% on the dollar at one point. It recovered its poise however rival coin Terra (luna) plunged 98% in value and stayed down.
Could there be another challenge today and another rout for tether? In short, yes and if Tether fails it could pull the rug from under Bitcoin which has already halved in value since its peak. Not to mention the rest of the crypto coin universe.
And that risks a panic spreading into the real world financial markets as fear grips the imaginations of traders and managers on the Worlds great exchanges. Bitcoin in particular has entered the respectable business, banking, and investment arena, not to mention recognition by several States, so a collapse now has direct impact in what the traditionalists regards as the real world of money and investment.
This Friday the 13th has the potential to produce a ‘Lemans’ type event more so than most days. And some might say if not now, then when?
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