Stablecoins: Safe or a MASSIVE Crypto Risk?? 😲

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0:00 Intro
1:56 Stablecoin Overview
5:03 Stablecoin Risks
8:40 China & Tether
11:24 Risks Justified?
15:58 Do Stablecoins Manipulate?
19:27 Conclusion


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Chainalysis Report on Stablecoins:


🤔 Stablecoin Overview 🤔

These are cryptocurrencies that are pegged one for one to the value of another asset. In most cases, this is a fiat currency like the US dollar

Stablecoins are able to maintain their peg thanks to two separate mechanisms

The first is decentralised stablecoins that rely on collateralised debt and smart contracts to maintain their peg

The second are centralised and fiat backed stablecoins that hold a certain amount of cash in a bank in order to make sure the currency is backed one to one

Stablecoins are also essential for the smooth functioning of crypto markets

😨 Stablecoin Risks 😨

Perhaps the most important of these is what is more generally termed a “run on the bank”.

Quite simply, it is a situation where all of those who have the stablecoin in question will rush to withdraw all at the same time. This could be as a result of some sort of lack of confidence in the stablecoin.

Moreover, the reserves that are backing up stablecoins are not always completely liquid.

There are also a number of sparks which could lead to this “Bank run” scenario on the market. These include regulatory crackdowns and other stringent actions.

😨 China & Tether 😨

Ever since China cracked down on Yuan-Bitcoin trading back in 2017, a massive market has opened up for USDT-Bitcoin trading.

Over the past 4 years, the Chinese regulators have let it slide as the market mushroomed. However, they have begun a hard crackdown on crypto in the country.

China now has a strong incentive to crack down on the trading of all cryptocurrency.

Mass amounts of USDT being dumped on the market could hammer its price and drive it off the peg.

💁🏻‍♂️ Fears Justified? 💁🏻‍♂️

I should point out that Tether has been under some of the most intense scrutiny over the past 2 years.

After more than 2 years investigating Tether, the NYAG decided to settle with them.

Then, in March of this year you had that official attestation of the reserves of Tether that was issued by Moore Cayman. These are the local subsidiaries of Moore Global – a top 20 auditing firm.

Some people may have taken issue with this as they said that it was not a full audit. But then again, none of the other stablecoin issuers had done this.

🤔 Market Manipulation? 🤔

There are two academic papers that have tried to study the impact of these prints on the crypto market.

The first is this study by Richard Lyons and Ganesh Viswanath. It takes a look at the price impact on cryptocurrency immediately post the issuance of a large amount of stablecoins.

They used statistical analysis and they found that there was no systematic evidence that stable coin issuance affects cryptocurrency prices.

Another paper also found inconsistent results which showed that markets moved just before the print and that the size of the print had no impact on the prices itself.


📜 Disclaimer 📜

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading Forex, cryptocurrencies and CFDs poses considerable risk of loss. The speaker does not guarantee any particular outcome.

#Stablecoin #Bitcoin #Tether #Crypto #USDT #Risks #crypto



  • What do you guys think of the stablecoin risks? Justified? If you want to keep up to date with my analysis off the tube then don't forget to follow me on my only official social channels 👉

  • I agree that the China risk is unlikely but the question of whether they will be able to back all their usdt with usd in bank reserves is very serious. Yes, Coinbase added them to their exchange and other institutions are also displaying trust towards but just like it was during the financial crisis you really never know about how reserves and resources are structured in a company/institution until its too late. Surely it won't kill the crypto industry but will definitely every damage DeFi protocols and result in loss of trust from many people in the crypto industry for a long time. There should be another way in which Stablecoins can store fiat value

  • 11:55 you just speak Portuguese ??

  • These Tether people are not serious people and one of them is involved in pedo. I don't trust them.

  • I highly recommend diving into terra blockhain and their algorithmic stablecoins. #UST adoption is strong

  • That's the type of guy that calls bear news "fud"

  • Love your information videos have learned a boatload of crypto news that helps me understand it all..

  • Hi Guy, thanks you for the content you upload, it’s very valuable. Do you know about Reserve Protocol? They have a two coin protocol to address some of the issues you comment on the video (RSR and RSV). It would be wonderful if you talk about the project on a video, since it helps a lot of people in countries with hyperinflation ! Thanks again!!

  • This if funny, read this until to see the funniness – "stable coins have fiat currency as reserve"
    fiat currency have physical gold as reserve (except USD !) People who hold large number of Bitcoin wants to be come the eGold. People who hold large reserve of physical gold want gold to remain the superior asset class. People who hold large reserve of land, are laughing at everyone of us!

  • while fiat currency is approaching hyper-inflation as governments worldwide keep on printing fiat money, institutions are practically laundering their monies through DEX by putting funds in leading crypto currencies, hence the rise of crypto coin valuations in 2021..forget the FUD and sudden hype with retail investors..hold on for a wild ride, crypto has nowhere to go but UP, as technical developments of ecosystem arise, partnerships forged between DeFi & conventional finance, and appetite to adopt CBDCs are being accelerated due to this pandemic

  • Would not be "a black swan event" when you're here talking about it. Black swan events are unforeseen by definition.

    Interesting video, with great insights!

  • APTY stock 🦍 at $.01 will be the next AMC, TSNP, GME MOVE.Check the 3 month chart. Stablecoin going live pegged to USD and Gold will compete against Tether and USDT.Apple settlement July 26 🚀 🦧 🚀

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  • If Tether failed it wouldn't surprise me if most liquidity moved to other centralized stablecoins & the most dominant decentralized stablecoins like Dai & TerraUSD which are more immune against regulators & can't freeze peoples funds like Tether & USDC can. The main problem more decentralized, collateral backed & algorithmic, stablecoins still face seems to be that they can't be used across multiple blockchains as easily.

  • More worrying than bank runs, are the risks to decentralized finance from embedding in Defi central privately controlled stablecoins like USDT, USDC, BUSD. This gives the issuers or "regulators" absolute power over user funds, since they permit issuers and authorities the ability to enforce rules, hold funds' hostage, confiscate funds, or just block wallets whenever they see fit. It should be concerning that Circle the issuer of USDC are busy fund-raising to enable listing with the Wall St mafia, another effective Yank monopoly in the making no doubt. This race to control currency isn't dissimilar to the FED's 1913 USD takeover. How can swapping state controlled money to privately controlled money be improvement? The less centralization & the wider the basket of collateral (hopefully excluding private coins like USDC) the better. I appreciate using the private coins is handy, however, we should be looking more toward algorithmic stablecoins like possibly Terra's UST offering, not blindly handing control to the likes of Circle Inc.

  • Sorry no audit and money put in bank account for a day and then taken out the following day. Very biased analysis

  • The way I see it, by holding stable coins you may be exposing oneself to risks inherent of both cryptocurrency investment and the risks associated with the pegged fiat asset.

  • Blah blah blah coffeezilla is a troll who does no research whatsoever. He's always wrong about everything and he just plays on people's fears for views. Guy does actual research.

  • I love the fact that stablecoins can't be banned by ANY government unless they ban the ENTIRE internet in a country which is NOT going to happen! LONG LIVE CRYPTO!

  • Thoughts on RSR as a hybrid fiat/crypto based stablecoin?

  • 12:28.. "A top 20 Auditing Firm" C'om Guy…Really!!! A firm on The Cayman Islands, that alone is Suspicious …20:31 "The Fed hasnt gone a full audit either" …Wow…The Coin Bureau has "Jumped The Shark"…..Tether founders have more insentives to lie, cheat, manipulate, steal …… have a poor track record of good business practice and you wat to compare them to the Fed, on your own words, "The biggest Ponzi" scheme". I love Crypto, but Stable Coins need more regulations

  • Holding some Stablecoins in my Atomic Wallet. Still considering the gems to buy in this bearish market.

  • Who else here for medical advice?

  • I thought only central banks were allowed to counterfeit money, now anyone can do it?

  • Banks were once fully backed until they realized they need not be, we have the same thing going on here. Print new coins, who's gonna notice. Until there's a run. But banks get bailed out by central banks, who bails out tether. Oh wait Thether can just print more tether and sell it for fiat. Then the fed will print more fiat and buy more cops to shut them down. Not everyone can have a printing press or can they?

  • ShibToTheMoon! We went from "gold/silver" to "paper/digital" money, (for the non believers, ask your self) so why not to "Crypto" money? Crypto currency is the future!

  • Tether's background is really shady and full of misdirects and lies. USDC gets more confidence from me.

  • Oh god, this ass is part of the scam! LOL!

    "Stable coins will better than banks on bank runs!"

    Uhmmm no. Because FDIC takes over failed banks and makes good on depositors… no national bank nor reserve will come to the rescue to a fraud over extended stable coin.

    "Regulatory bodies will make stable coins fail with their regulations."
    Ummmm exposing a pump scandal that that they're tether printer go burrr to pump the underlying reserves of crypto on exchanges that tether itself owns as well as affiliate Bitfinex and Binance… Bybit out there tether only… etc.

    Tens of billions of dollars trading on exchanges with 100x leverage and various other defi nonsense… USD doesn't compare to the trading volume of tether.

    They've become a trillion dollar pump scam conducting their own fractional reserve lending nonsense at 3% reserve.

  • The intro got me dying, love this content

  • Stable coins are no different than a bank holding your money, in fact it’s probably better and more stable.

  • Bitfinex, (aka Tether) is a Central Bank. Money printing for the insiders.

  • C F

    Can you please take a look at Polkadex (PDEX) ?

    It’s a multi-billion project with 100x potential !!!! 2 month left for the mainnet launch !!

    It’s the biggest DEX building on polkadot !!

    Huge companies backing the project 💰!!!’’

  • Even though the tokens are "decentralised" the mere fact that there is a centralised entity responsible for issuance and redemption is THE RISK! And how decentralised is DeFi when we have this centralised stablecoins? Fortunately, there is a solution, UST from terra blockchain is one of the few decently big, decentralised algorithmic stablecoins which never lost the peg. And it's growing rapidly!

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