Bitcoin Explodes to $7,500 as Tether Loses USD Peg

Bitcoin Explodes to $7,500 as Tether Loses USD Peg

Tether (USDT) stablecoin lost parity with the US Dollar after its price fell to lowest levels within the last 18 months.

"1. All cryptocurrency and fiat withdrawals are, and have been, processing as usual without the slightest interference; 2".

Following the split between Bitfinex and Noble Bank, the exchange created a shell account with Hong Kong-based HSBC according to the Block's Mike Dudas.

"Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this".

Well, Bitfinex has released a statement, saying that it has obtained the approval of its banks to enable fiat withdrawal and deposits. One Tether token can now be purchased for $0.97 or 0.00014704 BTC on major cryptocurrency exchanges including Binance, MBAex, Bitfinex and ChaoEX. Since at least 2017, some market watchers have alleged that trading in Tether's coins on Bitfinex has helped prop up Bitcoin's price.

A little-known token may be fueling Bitcoin's rise.

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Bitcoin's price varies from exchange to exchange, but the weighted index of prices reported by Coindesk puts it at $6,502.14 as of 10:30 p.m. EDT, up from a daily low of $6,239.44 but down from an intraday high of $6,946.50. That appeared to calm markets somewhat, with Tether paring some of its losses and Bitcoin giving up some gains.

The false report coincided with a routine Tether wallet maintenance. The core of the allegation is that Bitfinex issued Tether tokens without the US dollars held in reserve that are meant to underpin the cryptocurrency, a claim strongly denied. However, this has never been confirmed by independent auditors. Ties between Friedman LLP and Tether were dissolved, only furthering the skepticism surrounding USDT. According to the charts on CoinMarketCap, there is more than 20% uprooting in Tether's valuations in the last week.

Furthermore, professional trader and educator Tone Vays has gone live on YouTube to spend over 83 minutes talking about the Tether situation. There have been concerns regarding Tether's liquidity for quite some time now, and the lack of public third-party audits have cast a dark shadow over this project.

The firm that runs the digital currency, Tether, Ltd., has endured questions on whether or not it holds enough "reserves" to match the amount of tokens in circulation. Momentarily, the price of Tether crashed to sub-90 cents with the entire market rising as USDT was being emptied and money was pouring back into the rest of the market.

"Hypothetically, when the supply of USDT on Bitfinex surpasses a certain level required for maintaining operations (i.e. a seamless flow of deposits and withdrawals), a batch of USDT would be sent from Bitfinex to Tether for redemption against fiat United States dollars".

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