Sorry if this is an old conversation:
Right now the BitBTC market is thin - no one is shorting or selling any BitBTC. You could theorize that anyone who currently does hold BitBTC is short-term bearish on BTS.
So ive been contemplating what if someone does have a largish amount of BitBTC right now and refuses to sell it? If BTS were then to drop by 50% there is no one who is selling BitBTC which can be used to cover short positions. To someone new to BitShares, it seems to be a matter of blind faith that the lead developers wont dump and crash it 50% causing a blowout in the BitBTC peg.
The BitUSD market is less vulnerable because its volume is large.
Another point is that as the BTS price decreases, the incentive to sell bitBTC increases. If BTS drops 50%, someone holding bitBTC could sell it for a 2x profit. The higher that profit goes, the fewer people are just going to hodl.
But the cool thing is that it doesn't actually matter if the hodlers sell, since we could just short sell! If BTS drops 50% tomorrow, I'd be more than happy to short bitBTC, and I'm sure I'm not the only one.
The funny thing is that bitBTC has consistently been a "better" peg than bitUSD in the sense that it pretty much never trades at a discount to real BTC. Of course it doesn't have the liquidity of bitUSD, but the buy wall is almost always below the feed price and the sell wall is almost always above it. Contrast this with bitUSD, where the sell wall is absolutely never
above the feed price.