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Is Tether a problem or is it the Bitcoin savior?

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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

The rise of the crypto casinos

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In the hyper-competitive world of online casinos, operators are always looking for ways to stand out from the crowd. The most usual methods include using distinctive branding, offering generous bonuses and making sure that they are on all of the major so-called affiliate sites where players can compare and contrast casinos’ different offerings.

But now a whole new generation of casinos are starting to emerge – ones whose key difference isn’t what and how you play, but more in how you pay.

The rise and rise of the cryptocurrency casino is seen by many as the next logical step in a world that is slowly but surely starting to accept that Bitcoin, Ethereum, Ripple, et al. are certainly here to stay.

Of course, it’s the first of these cryptocurrencies that has really grabbed the headlines and led the way with its meteoric performance in 2017 when it seemed like its $20,000 value was just the start of the story. Admittedly, this was short-lived and the value quickly fell back to a more sustainable level but, if it achieved one thing, it was to cement this exciting new kind of currency in the consciousness of the general public.

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Investors Beware: Another Large Bitcoin Crash Might Be Coming

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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.

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The Bitcoin Revolution: Everything You Need To Know To Take Profits

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Bitcoin is soaring high in the cryptomarket once again, and experts are expecting a return of the bullish trend of 2017. The current Bitcoin price is $7,615 as of 23 May 6:56 AM UTC. This significant jump comes just six months after the Bitcoin price plummeted to a low of $3150 in December 2018. Since then, Bitcoin has experienced steady growth and gain in the market. However, in the last 30 days, the Bitcoin price peaked to $8,320.82, its highest price ever. This phenomenal jump occurred in a span of only 10 days breaking the Bitcoin record so far of significant gains made in short time frames. This positive growth has led to experts forecasting the Bitcoin price to hit the $20,000 mark by the end of this year.

Since entering the market almost 11 years ago, Bitcoin is still at the top of the global cryptocurrencies list. The current circulating supply of Bitcoin is at unbelievable 17,708,875 BTC. The market trend of the Bitcoin price has remained positive even when the currency did not maintain an uptrend. Cryptocurrency researchers believe that Bitcoin has the potential to grow up to a high of USD 50,000 within the next two years.

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