Crypto market overview: Bitcoin falls in arbitrage trap amid Tether sell-off

Lloyd Doyle
October 18, 2018

What we know for certain up to this point is that the price growth of BTC isn't organic, wasn't part of the expected dynamics (as pointed out by Tone Vays in his technical analysis), and Tether is still an instrument to manipulate the price on an extended number of exchanges which make use of it. This inevitably led to the temporary price decline. That sell-off, in turn, both drove down USDT's price and simultaneously drove up bitcoin's as traders sought to dump their Tether for BTC. In August 2017, Tether went on it's all time low of $0.91, which was also largely due to banking problems faced by BitFinex.

Meanwhile, stories emerging around Tether, has not done much good as retail investors are now exchanging their Tether holdings for Bitcoin and other top performing coin. However, Tether was not so lucky, as it lost its grip on the US Dollar peg, nearly the same time Bitcoin went up.

However, today's early trading has seen the Bitcoin price surging to as high as $6,965.09, which was its highest level since September 5.

The third largest exchange in crypto-land, according to CoinMarketCap's adjusted volumes, will soon offer pairs with Paxos Standard Token (PAX), Gemini Dollar (GUSD), TrueUSD (TUSD) and USDC//Coin (USDC).

Bitfinex claims it is not insolvent despite the stream of media articles claiming so.

Due to the fallout over cutting ties with Noble Bank, Bitfinex had a temporarily suspend deposits which caused some panic in the markets. One Tether token can now be purchased for $0.97 or 0.00014704 BTC on major cryptocurrency exchanges including Binance, MBAex, Bitfinex and ChaoEX. Tether and Bitfinex share a CEO, Jean-Louis van der Velde, as well as some of the same management team.

A little-known token may be fueling Bitcoin's rise.

But Tether has never produced an audit showing it has the purported reserves. During his time, he commented that the only reliable and honest exchanges are the ones like Bitstamp which aren't linked to Tether. Tether has gone down and analysts predict it will be back up again. Tether is supposed to back all USDT in dollars, but after the loss of Noble Bank of Puerto Rico as the chief source of financial services, there is a question of which bank holds the assets that Tether claims to have.

Binance has clarified that they do not have any plans of delisting Tether amidst rampant rumors and volatility. That's because, as demonstrated by researchers at the University of Texas this past June, Tether has likely been used to "provide price support and manipulate cryptocurrency prices".

"Hypothetically, when the supply of USDT on Bitfinex surpasses a certain level required for maintaining operations (i.e. a seamless flow of deposits and withdrawals), a batch of USDT would be sent from Bitfinex to Tether for redemption against fiat Dollars".

Other reports by Iphone Fresh

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