Earlier this week, the crypto community was in for a shock that shook the crypto market when the New York Attorney General’s (NYAG) office pursued an investigation into controversial stablecoin Tether and cryptocurrency exchange Bitfinex that allegedly tried to cover up the $850 million loss.
So fair value on Tether is somewhere between 0.75 minimum if you thought the LOC was worthless up to 1.00 maximum if you thought the LOC was worth par. If you said the LOC was worth 50-75 cents on the dollar, tether/USD fair value is 0.88-0.94.
— Cryptopotle (@cryptopotle) April 26, 2019
Bitfinex had apparently sent $850 million to a Panama-based company that resulted in the loss of these funds. In response, the exchange used a significant amount of Tether’s cash reserves that are supposed to be used to maintain the $1 dollar peg of each USDT token.
— Max Keiser, tweet poet. (@maxkeiser) April 27, 2019
Concerns about Tether and Bitfinex playing a huge role in driving or as some alleged manipulating Bitcoin price has been going for well over a year now.
But this time, with the report from the authorities itself, the crypto community got concerned yet again about USDT being not backed by USD reserves in the 1:1 ratio. Being a popular stablecoin choice, this would certainly have a big impact on Bitcoin price.
$BTC Similar percent dump, from the same level, two weeks apart and look at the difference in sentiment !!! When support breaks it magically turns into resistance !!! What’s funnier is when you zoom out to the weekly, nothing really happened. This asset is driven by Emotions pic.twitter.com/o7wdxDUdet
— TraderArjun (@arjunkkohli) April 26, 2019
In response to this news, Bitcoin reacted but barely. On April 23rd, Bitcoin price went down to $5,080, but stayed above $5k, from the high of $5,500. Currently, Bitcoin is yet again in the green by 1.34 percent as BTC/USD trades at $5,200, at press time.
Ameritrade & eTrade entering crypto would likely be much bigger than any Tether bearish developments. https://t.co/SXws7vY7CK
— Alex Krüger (@krugermacro) April 27, 2019
Chris Burniske, a partner at venture capital firm Placeholder VC, spoke about this relatively small impact of Tether fiasco on Bitcoin price as he said,
“On one hand, I’m impressed with how BTC has held given the #Tether news, on the other hand the ~$200 spread between bitfinex & other exchanges is making me queasy.”
Burniske further said, the fact that bad news caused hardly any selling off shows the strong sentiments of the market as it is something “we’d expect in a bull market.”
However, despite all the positivity or as he says “hurrahs” around the recent golden cross printed by Bitcoin, he doesn’t think we are yet in a bull market. He believes Bitcoin needs to take a drop back to the $4k level in order to create a sturdy base for the bull market that is to come.
“With BTC needing to retrace to either $4K or the 200 week SMA to have a rock solid base for the bull market to come (IMO), we could get our last great opp of 2019.”
Burniske is rather “very curious” to see how this tumultuous news plays with the brewing euphoria of announcements that are sure to come with the NYC Blockchain Week.
After the initial impact, USDT-USD and BTC-USD have been inversely correlated. Those exiting USDT into BTC push BTC-USDT higher, and BTC-USD follows. Similar price behavior took place in October 2018. pic.twitter.com/dSAksxdUc5
— Alex Krüger (@krugermacro) April 26, 2019
As the Bitfinex and Tether situation continues to unfold, investors are expected to continue to migrate away from USDT.
And as economist and crypto trader Alex Kruger says this could push the Bitcoin prices up. Moreover, it will only become clearer how much of an impact this situation would have on the Bitcoin and crypto market, in the future.
- Source: First Appeared Here
- Published Time: 2019-04-29 00:26:17
The views and opinions expressed in the article Tether (USDT) Blunder Didn’t Have Any Effect on Bitcoin (BTC) Price (Yet) do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.. Connect with 48coins on Facebook and share your thoughts about the post Tether (USDT) Blunder Didn’t Have Any Effect on Bitcoin (BTC) Price (Yet) Here are some top prominent words: alex krüger @krugermacro; base for the bull; base for the bull market; crypto community; krüger @krugermacro; thought the loc.
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