Connect with us

Blogs

Bitfinex/Tether (USDT) Scandal Knocks $10 Billion Off Market Cap

Published

on

Bitfinex
READ LATER - DOWNLOAD THIS POST AS PDF

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.

For the latest cryptocurrency news, join our Telegram!

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

Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

Published

on

Bitcoin crash
READ LATER - DOWNLOAD THIS POST AS PDF

The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

Continue Reading

Altcoins

Top 3 Coins to Buy Before They Go Big

Published

on

coins
READ LATER - DOWNLOAD THIS POST AS PDF

Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

Continue Reading

Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

Published

on

crypto credit cards
READ LATER - DOWNLOAD THIS POST AS PDF

It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

Continue Reading

Elite