Will Tether cause Bitcoin to crash?
It is worryingly quiet across news outlets and this really surprises me. October 15th felt like 2017 all over again, watching Bitcoin surge 1000 dollars in under an hour, throw in some news about Tether failing, some exchanges suspending deposits and withdrawals and I had to make another cup of coffee to make sure I was awake and not dreaming, or had gone back in time a year.
Any significant swing in the price of tether should come as a surprise to investors as the token is meant to have a static exchange rate of 1 tether token to $1.
It was around this time last year that I really had a look around for some quality information on Crypto and specifically what could derail Bitcoin. It seemed too good to be true as the price marched up and some reliable facts seemed needed. A tether collapse was seen by many as the biggest threat to Bitcoin getting stomped on. Why is it then that media a year later are reporting the big pump of Bitcoin and most Cryptocurrencies on October 15th 2018 as nothing of great concern? Tether is acknowledged as the catalyst but it is almost brushed aside as a concern.
Charles Bovaid writing for Forbes leads with
Bitcoin Breaks Out Of Its Malaise Following Tether Panic
No real concern in this article, in many respects it suggests the panic is a good thing saying;
‘Bitcoin prices rallied today, approaching $7,000 and reaching their highest in a month after markets responded to concerns about tether.’
For me a rally is a positive thing but I would think moving from Tether to Bitcoin is straight out panic, and if you’re panicking about a stable coin that is said to be used in 26% (5.85 bn $ of total volume 22.22 bn $ coinmarketcap.com) total volume of time of writing of the article. you might just be moving to from USDT to BTC to get the hell of the exchange altogether. The above article is typical of much of the reporting around the October 15th spike.
Has Bitcoin and Crypto matured to a point where a Tether collapse is not the end for us all?
Tether accounts for 26 % of all trades
We also have True USD$72,464,743 = 0.333033303330333 % , USDC (Circle)$10,816,553 = 0.04860486048604861 %, GUSD (Gemini)$1,151,035 = 0.006795679567956797 %, PAX (Paxos)$24,823,210 = 0.11161116111611162 % and more coming. Each will have a different risk coefficient but tether is still the leader with 26% total marketcap % is total volume of marketcap traded the last 24 hours (data from coinmarketcap.com)
So was this a move to get out of Bitcoin and into fiat? If Tether is failing I would expect a stampede. But if it is failing, what hard facts do we have? Not many! Tether has not been audited and has not shown any proof of funds yet, and with more serious players coming into the market the concern remains. Many traders see BTC as safer than USDT.
CNBC quotes Charles Hayter, the chief executive of comparison site CryptoCompare as saying There is concern about tether and whether it is truly backed by dollars and rumours about USDT (tether) being delisted from various exchanges. The concerns over tether not being fully backed 1 to 1 by USD held in bank accounts have been around for what seems like forever now and with no fresh news like a new SEC investigation or arrests then I have to disregard that as the catalyst. This then brings us to the delisting rumours. What do you know there? The rumours that Tether would be delisted from Binance turned out to be fake news, Binance is the largest exchange by volume and could also have sparked the sell-off.
Other theories could be that this was a stress test before an ETF announcement or some manipulation maybe. One thing is for sure is that if Tether is fully backed then the issuers will be very happy as they get a great deal on sales of an overpriced Bitcoin with the price going to 7,400 on Bitfinix at one point.
Me, I just think people wanted to ruin Tone Vays first public trade, a short of Bitcoin hahhahaha
