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Is Tether a problem or is it the Bitcoin savior?

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Tether

Over the weekend, Bitcoin took a pretty substantial hit that saw the world’s first ever Blockchain and cryptocurrency hit lows of about $5,880. Fortunately, however, this decline did not last long and Bitcoin’s price was able to bounce back relatively fast above the $6,000 neighborhood.

On the other hand, while Bitcoin and the rest of the coins were crushing, Tether (also known as the stable coin) was on an opposite bullish trend and for a good reason. According to reports, Tether printed over $250 million dollars worth of USDT over the weekend. Given that Tether’s USDT is pegged to the dollar by a ratio of 1:1, a total supply of $250 million was injected into the market at the point of the decline.

As a result, Bitcoin and the rest of the cryptocurrencies were able to bounce back from the bloodbath in a turn of events that raised concerns and opinions over Tether’s contribution to the market behavior. For some onlookers, the whole decline experienced over the weekend was a plan orchestrated by Tether’s whales in order to buy BTC at its lowest price. Others believe that Tether’s injection of $250 million into the market is nothing short of a god sent magic-bullet that saved the entire market from further decline.

Tether’s checkered past

Tether is not new to controversy. The US Dollar backed cryptocurrency has featured in the headlines for its connection to Bitfinex, a crypto exchange platform accused of using Tether to buy Bitcoin during low demand and later pumping the price to make a profit.

In fact, an academic paper was released earlier this month alleging that Tether was used at the end of 2017 and at the beginning of 2018 to pump BTC’s price to the $20,000 region. Since this news hit the crypto airwaves, lots of concerns have risen over the legitimacy of Tether’s USDT and its influence in the market.

Furthermore, Tether and Bitfinex have earlier been issued with subpoenas by the US CFTC (Commodity Futures Trading Commission) in regards to the above concerns. Plus, after claiming to have lost over $31 million in a coin heist last November, the market was shaken into a crash with Bitcoin and Ethereum taking the most from the hit.

Here is why some people are worried

The main purpose for Tether’s USDT is to be a stable coin that acts more like the federal reserve of the crypto industry since it’s backed by the US dollar on a ratio of 1:1. This basically means that you can exchange your USDT for $1. With previous concerns being about the lack of actual dollar reserves on Tether’s vaults,  critics have argued that Tether’s USDT tokens are created from thin air with the purpose of pumping the price of Bitcoin every time there is a dip in the market.

In fact, various market analysts have identifies that Tether’s printing of new USDT tokens tends to coincide with a dip in the price of Bitcoin, giving the company an advantage of buying Bitcoin at its lowest price. To back up this claim, an academic paper published by two academics from the University of Texas after a 2-year study of Tether’s market activity said that Tether’s price patterns tend to mostly be “consistent with supply based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices”.

Is there another explanation for Tether’s USDT market behavior?

Well, as it turns out, there is actually another alternative explanation and even though Tether limited has strongly denied claims of manipulating the market, all evidence points to a different direction. With the recent market decline last weekend, Bitcoin, Ethereum and the rest of the coins in the market were able to recover right after Tether, once again, injected $250 million USDT tokens to the market.

Charlie Lee, the creator of Litecoin, on the other hand, had a different explanation of what exactly was happening. In a post on twitter, he mentioned that:

Generally, this has been a precursor of the price going up. Tether gets printed when people deposit USD and get USDT back. This USDT will then be used to buy crypto. This is similar to someone depositing $250MM to exchanges. Of course, that doesn’t mean they will buy right away.

However, he also encouraged people to do their own research. For now, the verdict is still out on whether USDT is to blame for market crashes.

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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.

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Bitcoin

Blockchain technology outshines Bitcoin and Gold during global pandemic

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As the popularity of cryptocurrencies such as Bitcoin begins to level up with investments made in metals such as Gold, together they have both made significant advantages for investors who have taken a leap to invest in them.

However, thanks to the pandemic and the dynamic shift in investing and the economy, many investors have seen fluctuating losses and gains thanks to the uncertainty of the current business world. 

Many investors that backed companies who have exposure to blockchain technology have seen an approximate amount of 54% return on investments over the past year. This is even after considering how hard the global tech market and companies have been hit since the beginning of the pandemic.

What is blockchain technology?

Blockchain technology was first introduced as a supportive technology for Bitcoin. A blockchain is a simple, unchangeable and un-hackable digital ledger that holds transactions in little blocks attached to a chain. The transaction is duplicated and distributed across the entire network of systems on the blockchain, making it available for everyone on the network to see. 

Each block in the chain contains various transactions which are recorded on the participant ledger every time a transaction takes place. The database is decentralised and is managed by multiple participants known as Distributed Ledger Technology (DLT).

Although blockchain technology was birthed from Bitcoin and was widely adopted for the use of cryptocurrencies, the way it works and its security has made…

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Bitcoin

Bitcoin Surges After Tesla Bought $1.5 Billion Worth of BTC

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Cryptocurrency

The sudden rise of Bitcoin has been connected to the decision taken by the Tesla electric car company to buy $1.5 billion worth of Bitcoin.

The company explained in a filing with the Securities and Exchange Commission (SEC) that it bought Bitcoin to diversify its cash returns and more flexibility.

Musk’s Tweets also impacted Dogecoin’s price

Tesla also added that it will start accepting Bitcoin payments for all its products, although this will be based on a limited basis and applicable laws. If the company concludes and starts accepting cryptocurrency, it will make it the first major car manufacturer to accept Bitcoin payments. The company’s founder and Chief Executive Officer Elon Musk has developed an interest in Bitcoin and cryptocurrencies.

He has been tweeting severally about the viability of the Dogecoin (DOGE), which doesn’t have an important market value attached to it.

Few hours after endorsing Dogecoin, the cryptocurrency rose by an impressive 50%. But regulatory authorities are still concerned about the risks in cryptocurrency investments, with several regulatory bodies warning traders and investors they could lose all their money from crypto investments.

But for Tesla, the company decides to diversify its funds and increased its cash returns. However, Tesla also warned investors about the volatility of Bitcoin’s price in its SEC filing. According to the SEC…

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Altcoins

XNO Token of Xeno NFT Hub listed on Bithumb Korea Exchange

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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.

NFTs are already being actively traded in markets globally. For…

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