Mistrust in Tether has sparked a rise in the cryptocurrency market
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On Monday morning, traders at Bitfinex began to get rid of Tether (USDT) en masse, which caused its price to fall to an 18-month low and the growth of the crypto market as a whole..
The sharp sale of stablecoin is associated with fears of traders and investors regarding the transparency of the project and the provision of real dollars. From the very beginning of the Asian trading session, the token fell to $ 0.95, and at its peak on BitFinex, the price dropped to $ 0.85, but then quickly rebounded to $ 0.96. The last time such low rates were observed was in April 2017..
The impetus for such market behavior could be the news of the termination of Bitfinex’s partnership with Noble Bank, in which the funds necessary to support the stablecoin were deposited, which led to temporary destabilization. There were also reports that Tether LLC has a shortage of its own funds, the project is a scam and its management is associated with a crypto exchange. This raised doubts among traders who began to urgently convert USDT into other cryptocurrencies, which led to overvaluation of their rates on BitFinex and an overall market growth of $ 10 billion..
Within a few hours, the price of MTC increased to $ 6,960, but the subsequent adjustment reduced the value to $ 6,693. However, bitcoin peaked at $ 7,788 on Bitfinex and is still trading at an average $ 230 higher than on other exchanges. Most altcoins added 4-8% in price, while recently launched substitutes Tether, Gemini Dollar (GUSD) and TrueUSD (TUSD), rose 2.9% and 4%, respectively..
The exact reasons are not yet known, but anyway traders began to actively move funds to BTC and other stablecoins. Although, according to researchers from Princeton and Florida, the main threat China remains for the crypto market, who is capable manipulate miners to destabilize bitcoin.
text: Sid Nietzsche, photo: Shutterstock, TradingView