Published: Thu, October 18, 2018
Economy | By

Bitfinex Hits Banking Snag Whilst Tether Falters

Bitfinex Hits Banking Snag Whilst Tether Falters

On the other hand, on well-regulated platforms like Gemini and Coinbase, which offer insurance for their client's crypto holdings, Bitcoin only traded at a relatively measly $6,600, which was the "true" price of the digital asset. This inevitably led to the temporary price decline. When I was reading some of the social media last night, there were a great many traders on Bitfinex and other exchanges that didn't know what to do - they panicked did the only thing they could do to get rid of their Tether: buy Bitcoin, Ethereum and any other cryptocurrency. One of the suggestions was that Bitfinex would not fully notify banks they are working with a crypto exchange and instead use shell companies and their bank accounts on a case-by-case basis.

Tether has been a point of controversy in the crypto-sphere for some time now, with many suggesting that the USD-pegged cryptocurrency may not, in fact, be backed by an equal amount of United States dollars.

Tether continues to trade at a 2%-5% discount to the U.S. dollar, breaking the peg as rumors about Bitfinex and banking problems continue. The movement caused Tether (USDT) to drop below the $0.90 mark on Bitfinex, eventually, and to generate a slight surge in Bitcoin (BTC) value against the US Dollar. Bitfinex is one of the biggest exchanges with a lot of automated trades being made daily. The premium suggests that Tether holders may be rushing for the exit. This information is based on the Blockchain data provided by Omni, a second-layer protocol on the Bitcoin blockchain which provides infrastructure to Tether (USDT) tokens.

"Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this".

Questions surrounding Bitfinex and Tether are nothing new.

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

After a pretty much year-long bearish trend, the naysayers predicting Bitcoin's demise seemed to be gaining ground.

Furthermore, professional trader and educator Tone Vays has gone live on YouTube to spend over 83 minutes talking about the Tether situation.

There is no official reason for the USDT price to defect from its $1 value, at least not if there are enough dollars in financial reserves to warrant the current circulating supply.

Consequently, because the FSS failed to complete an actual audit (which must be done in adherence to the Generally Accepted Accounting Principles or Generally Accepted Auditing Standards), the document did little to alleviate industry concerns.

The leading stablecoin by market capitalization, which may face competition from recently launched counterparts, dropped by 2 percent in the 24-hour trading window yesterday. Trading of Tether has seen the price fall as low as 85 cents with the Kraken exchange.

Bitfinex has clarified its recent suspension of fiat transactions on its exchange and said that it will have a new improved fiat deposit system by October 16. It is usually not possible to purchase alternative cryptocurrencies such as Tether directly using U.S. dollars.

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