As Cryptos Surge, Tether Is In Free Fall - Bitsonline

As Cryptos Surge, Tether Is In Free Fall

As cryptos surge, Tether is in free fall, dropping to 87 cents at one point today. At press time, according to CoinBillboard, it is at 91 cents. Its previous historical low was 97 cents, in February, and historically it has never breached $1.06. Of course, in theory, one USDT is worth one USD exactly.

Also see: Cardano Project Says Foundation Mishandled Duties, May Move on Without It

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Cryptos Surge, Tether Is in Free Fall. What Is Going On?

Presumptively backed by one U.S. fiat dollar, the Tether-Bitfinex stablecoin has plunged close to ten percent today. There have long been concerns that USDT is not actually backed by fiat. Bitfinex cut ties with its auditors in January, stoking fears that Tether was not, in fact, backed by dollars.

Ironically, today’s massive price swings are demonstrating the possibility that those very fears might be playing out, but not in the way many expected. A recent University of Texas at Austin study asserted that half of the price rise of bitcoin during its 2017 bull run was a result of Tether being printed to prop it up. Today’s market activity would suggest that as trust in Tether fades, cryptos have not actually suffered.

The only reason for this is that there cannot be a panic exit to fiat, because, in fact, there is no fiat for quality to fly to. The flight to quality is to crypto. Tether antagonist Bitfinex’ed certainly believes the Tether crash he has long claimed to be inevitable is happening:

As Tether Appears to Be Meeting Its Demise, Bitcoin Soars

At press time, bitcoin is up over 6 percent in 24 hours, per Coinbillboard. Bitcoin has been trading at a premium on Bitfinex for a number of hours, further evidence that the flight from Tether to crypto is real:

Bitcoin once traded on Korean exchanges at a kimchi premium. It is currently trading on Bitfinex at a Tether risk premium. Only last week, Tether’s banking partner, Noble Bank International in Puerto Rico, was reported to be on the brink of insolvency. Tether, the company, was said to have since found a new banking partner in HSBC. Bitfinex reportedly stopped accepting fiat deposits last week.

Bitfinex tweeted minutes ago that the deposit pause did not affect withdrawals of fiat or cryptocurrency:

 

Is Binance Set to Dump Tether?

Rumors are also swirling that Binance is preparing to delist Tether and ditch all USDT trading pairs. Though unsubstantiated, the rumors throw further fuel to the current Tether fire. Bitsonline reached out personally to Binance operational staff by telephone, but they were unable to confirm or deny the rumors.

Have your say? Tether is in free fall. Is Tether dead?


Images via Pixabay

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