Crypto traders simply cannot shy away from the fact of correlation between sudden movements in Bitcoin price and release of significant Tether quantities. Some are even voicing concerns over the rocket speed for executing large volume of margin trades following the new USDT release.
Bitcrypto’ed, a notorious Bitfinex critic documented the market turmoil which closely followed release of 20 million USDT on 8th of November. Data revealed by Bitcrypto’ed showcased the execution of margin longs worth $25 million USD in less than half an hour along with a single market order valued at $13.5 million USD. Such background activities added positive stimulus in shooting up the price of Bitcoin from $7075 USD to $7350 within an hour’s time span.
Starting from the year’s beginning, the supply of Tether has increased by more than 3400% which is 550 million at present compared to 15 million in January. Various market watchers have adhered paramount importance to this massive rise in Tether since its majority shareholder Bitfinex failed to avail certain banking services following the termination of wire transfers to exchange by a Taiwanese banks associated with Wells Fargo.
Shortly after the same, Tether posted the below mentioned statement in its website:
“Tether is currently expecting continued delays in processing international wires to and from tether. To users… since april 18, 2017, all incoming international wires to tether have been blocked and refused by our taiwanese banks. As such, we do not expect the supply of tethers to increase substantially until these constraints have been lifted.”
Bitfinex’s Phil Potter has tried to demarcate between these two companies by stating that, “Tether is a completely separate entity [from Bitfinex].” However he could not disagree to the fact that Tether “operates through the same money service money operator license that Bitfinex operates under in Hong Kong.” When asked about Tether’s banking relationships Mr Potter had pointed out that Tether “ha[s] several banks in multiple jurisdictions, our principal banking relationships are in Taiwan.” Nevertheless he failed in revealing which banking institutions had been providing services to the company since April thus further hiking up the level of suspicion.
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