Europeans waking up on Monday morning, have seen the price of bitcoin surge. At its peak the crypto coin reached a value of $7788 (measured on Bitfinex), while the coin is circulating around $7000 now. That’s up 10 percent from Sunday morning. But that’s not the biggest news. The dollar pegged stablecoin Tether is losing its value.
As reported before, Tether is connected to Bitfinex and that exchange is under heavy fire from online criticizers. One of the situations the market is facing right now, is the fall of Tether (USDT). It’s probably the major reason why the price of bitcoin is going up, as it’s often pegged against Tether. And despite USDT being a stablecoin, it’s actually losing its value.
Bitfinex lost its Puerto Rico-based banking partner, which basically went bankrupt. This bank was owned by one of the major players behind Bitfinex, and of course he’s also part of Tether. When the banking part falls, Bitfinex can no longer handle money transfers properly and Tether has no actual money behind it. That’s the scenario that’s playing out right now, and the reason why all this is happening.
Investors are fleeing from Tether. The value of the stablecoin dropped significantly. On Binance, another crypto exchange, two stablecoins can be traded against each other and traders can make a ten to twenty percent margin on that trade!
Investors are moving to True USD. On Bittrex there’s been a significant volume increase. Measured over the past several 30 minutes intervals, there’s been an increase between 20 and 50 percent every 30 minutes.
When it comes to Bitcoin, we can expect it to drop below 7000 again and perhaps even back towards 6600, which is historically a price point BTC is comfortable at. For Bitfinex and Tether, this looks like the beginning of the end.