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Bitfinex/Tether (USDT) Scandal Knocks $10 Billion Off Market Cap
The still-recovering crypto market endured a massive loss on Thursday, April 25th, after allegations were made against a popular crypto exchange, Bitfinex. According to the New York Attorney General’s office announcement, the exchange covered up a massive $850 million-large loss by using the crypto market’s largest stablecoin, Tether (USDT). The Attorney General’s office also claims that the amount was taken from customer and corporate funds.
The announcement was followed by a $10 billion drop in the market cap of the entire crypto industry, and it even managed to affect Tether’s peg to the US dollar. However, the newest scandal quickly spread, as mentioned, and even the largest cryptocurrencies are currently experiencing massive losses, as the coin owners entered a massive sellout.
At the time of writing, the largest losses among the top 10 largest coins are being experienced by Ethereum, XRP, and Cardano, with their prices dropping by nearly 5%. Meanwhile, while the total market cap of the crypto industry did drop by $10 billion, and it reached $167 billion at one point, it is currently seeing recovery which allowed it to climb back to $171 billion at the time of writing.
The announcement impacts Tether
As a stablecoin, Tether’s price is supposed to be permanently bound to the price of USD, meaning that 1 USDT = $1. However, at 21:00 UTC on Thursday, USDT price started dropping from the set price of $1 to around $0.955, according to several exchanges and TradingView. The price then climbed back up to $0.97, and at the time of writing, it sits at $0.994120.
The other stablecoins immediately started seeing a lot more usage as numerous investors from around the world shifted from Tether towards them, including GUSD, USDC, and TrueUSD. In addition, Maker (MKR), which is the cryptocurrency behind the MakerDAO project, is also seeing a massive loss of over 14.65%, with its value dropping by over $73 in the past 24 hours.
As for Tether, this is far from being the first scandal in which the stablecoin was involved, and it might impact its future performance and usage. The coin has been rejected by a lot of investors ever since it was suspected that the company behind it might not have the funds to back every single USDT coin in circulation. Now, it is possible that even more investors will avoid using it, which is good news for its competitors, but it might also be devastating for Tether itself.
The crypto space suffers a massive drop in prices
While the announcement by the Attorney General’s office only concerns Tether and Bitfinex, a lot of other major cryptocurrencies had started trading in the red, and seeing massive price drops. Bitcoin, for example, dropped down to $4,953 after the announcement, although it is currently well on its way to recovery, with the price at the time of writing once again being above $5,300.
However, around 4,000 BTC was reportedly moved from Bitfinex following the announcement, which translates to around $20 million. Similar moves were seen before whenever an exchange was considered unsafe or troubled, which is not a particularly surprising reaction.
As mentioned, many other stablecoins started seeing a lot more usage following the announcement, as investors started selling Tether and going for its alternatives, such as GUSD or USDC. Most other coins among the top 10 largest cryptos also saw massive drops, but fortunately, the prices are currently starting to return to normal, indicating that the scandal might not leave particularly large consequences on the entire market.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Photo by Quintin Gellar from Pexels
Hong Kong, Hong Kong, 25th January, 2021, // ChainWire //
Xeno Holdings Limited (xno.live ), a blockchain solutions company based in Hong Kong, has announced the listing of its ecosystem utility token XNO on the ‘Bithumb Korea’ cryptocurrency exchange on January 21st 2021.
Xeno NFT Hub (market.xno.live ), developed by Xeno Holdings, enables easy minting of digital items into NFTs while also providing a marketplace where anyone can securely trade NFTs.
The Xeno NFT Hub project team includes former members of the technology project Yosemite X based in San Francisco and professionals such as Gabby Dizon who is a games industry expert and NFT space influencer based in Southeast Asia.
NFT(Non-Fungible Token) technology has recently gained huge focus in the blockchain arena and beyond, making waves in the online gaming sector, the art world, and the digital copyrights industry in recent years. The strongest feature of NFTs is that “NFTs are unique digital assets that cannot be replaced or forged”. Unlike fungible tokens such as Bitcoin or Ether, NFTs are not interchangeable for other tokens of the same type but instead each NFT has a unique value and specific information that cannot be replaced. This fact makes NFTs the perfect solution to record and prove ownership of digital and real-world items like works of art, game items, limited-edition collectibles, and more. One of the ways to have a successful…
2020 has been an incredible year for crypto as investors have generated windfall profits and crypto projects have seen their businesses gain the spotlight they’ve been looking for. While Bitcoin has received most of the attention after major institutional investors announced they were accumulating the increasingly scarce asset, many altcoins have also seen their fair share of glory. When looking at all the big winners of the past year, the first project that probably comes to mind is Chainlink, having appreciated by more than 550% YTD and now valued at over $4.5 billion. But, the actual biggest winner of the year is HEX with a YTD return of over 5,000%.
I mention both of the above projects as they have each taken slightly different paths to achieve greatness. Chainlink has devoted resources toward building a fundamentally sound business with many strategic partnerships while HEX has spent vast sums of money on marketing and promotion. Both approaches are valid, but one thing is certain, it is absolutely imperative for crypto projects to let the crypto community know what makes them special. Of course, one of the reasons that makes crypto so valuable is the powerful blockchain technology that most projects are utilizing.
Cryptocurrency vs. Blockchain Technology
It’s important to make a distinction between blockchain technology and cryptocurrency. Although they are often used interchangeably, they are different. Blockchain technology and crypto were both created after the 2008 financial crisis, but cryptocurrency…
Altcoins
XENO starts VIP NFT trading service and collaborates with contemporary artist Hiro Yamagata
Hong Kong, Hong Kong, 24th December, 2020, // ChainWire //
The XENO NFT Hub (https://xno.live) will provide a crypto-powered digital items and collectables trading platform allowing users to create, buy, and sell NFTs. Additionally it will support auction based listings, governance and voting mechanisms, trade history tracking, user rating and other advanced features.
As a first step towards its fully comprehensive service, XENO NFT Hub launched a recent VIP service to select users and early adopters in December 2020 with plans for a full Public Beta to open in June 2021.
“NFTs are extremely flexible in their usage, from digital event tickets to artwork, and while NFTs have a very wide spectrum of uses and categories XENO will initially focus its partnership efforts and its own item curation on three primary areas: gaming, sports & entertainment, and collectibles.”, said XENO NFT Hub president Anthony Di Franco.
He also added “This does not mean we will prohibit other types of NFTs from our ecosystem However, it simply means that XENO’s efforts as a company will be targeted into these verticals initially as a cohesive business approach.”
Development and Procurement Lead, Gabby Dizon explained, “Despite our initial focus, we found ourselves with a unique opportunity to host some of the works of Mr. Hiro Yamagata. We are collaborating with Japanese artist Hiro Yamagata to enshrine some of his artwork into NFTs.”
Mr. Yamagata has…
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