Crypto Trade Volume Doubles Overnight, Have The Bears Run Out Of Steam?

Bitfinex Reopens Deposits But Stays Silent About Bank Arrangements

Bitcoin (BTC) jumps 10% then gives it back quickly. This led to the exchange halting all fiat deposits temporarily.

Tether (USDT), the most popular USD-backed "stablecoin", just fell below the $0.90 mark on Bitfinex as the regular investors turned to Bitcoin (BTC) and other cryptocurrencies, worrying about the USDT reserves.

The company was also alleged to have partnered with HSBC Bank for banking transactions after earlier reports that it was struggling with its earlier partner.

Apparently, in the short-term, the sell-off and volatility of USDT might be useful for the crypto market as a result of the rise in the price of most cryptocurrencies, however as a matter of fact, this is not the case.

It doesn't take a whole lot of sleuthing for investors to figure out what's behind some of the recent Tether losses - news of an "unofficial audit" that gave the coin a thumbs-up failed to convince everyone that Tether is actually backed one-to-one by the USA dollar like it's supposed to be. Now with Bitcoin's USDT price being quoted at around $6,730 (as a weighted average of four Tether-paired markets) compared to around $6,383 for a dollar-bought BTC, that Premium now stands at around 5.75%.

It's also notable that for the first time, the USA -dollar-backed Tether has dipped under the value of a whole dollar - trading around $0.90 on some platforms.

Doubts arise because the value of USDT fluctuates at various crypto exchanges. Tether and Bitfinex share a CEO, Jean-Louis van der Velde, as well as some of the same management team.

Disclaimer: This is an opinionated article, and may not reflect the views of Blockmanity.

In other words, it seems as if someone at Bitfinex is using Tether to buy bitcoin in an effort to counteract price declines in bitcoin. It can only be found out with a clear and transparent audit. According to cryptocurrency analysts, this statement could go a long way toward stabilizing USDT.

At the same time, Tether's USDT/USD pair lost came crashing down below 0.95-fiat at the beginning of the Asian session.

"Faith in Bitfinex's financial situation and ability to fully back Tether has been a recurring question", Chu said.

Although the memorandum was produced by a major Washington D.C. law firm, it does not absolve Tether of any of the circulating rumors.

After a few hours, the KuCoin exchange posts another tweet.

Bitfinex has clarified its recent suspension of fiat transactions on its exchange and said that it will have a new improved fiat deposit system by October 16.

"I hope some Tether person writes up an insider's description of what is happening behind the scenes right now as the peg fails". For every unit of Tether, there are expectations that there is a unit of US Dollar to it.

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