We strongly expect that exchanges will need to delist the world’s largest stablecoin, Tether, for all residents within the European Union exactly a month from now. This will be negative in the near term as it fragments liquidity and ecosystems. However, in the long run, it is positive as it reduces what is arguably the largest systemic risk in the crypto market.
The systemic risks of crypto were substantially mitigated last week as Binance settled various charges with multiple US agencies. Despite this clearly positive news, the crypto market did not react, leading us to remain pessimistic in the short term until we observe renewed inflow and interest in crypto. Tether remains the largest risk to crypto.