The overnight surge in Bitcoin’s price is being attributed to an alleged breaking of the US Dollar’s peg to stablecoin Tether (USDT).
Bitfinex is now trading BTC <> USDT at nearly a $1000 premium. This doesn’t feel right? pic.twitter.com/5qQcEr3dMU
— Jackson Palmer (@ummjackson) October 15, 2018
The highest BTC prices, exceeding $7,200 in many cases, were seen on the exchanges that support USDT – Bitfinex, Kraken, Binance, and OKEx – whilst non-Tether platforms rarely moved above $6,700.
UNRESOLVED TETHER QUESTIONS
With Tether falling by 6% at one point, long-standing questions were once again raised about whether USDT has the necessary USD reserves to back all tokens in circulation.
Cryptocurrency observers took to Twitter to alert others of the price spread which subsequently escalated to include other leading assets such as Ethereum.
Twitter is once again alight with commentary on this new development, with New York-based market analyst Alex Kruger pointing out the irony of a ‘stablecoin’ bringing momentum to the markets.
Bitcoin has officially broken out of the bear market …. on Tether exchanges. $BTC > 7700, +21%.
— Alex Krüger 🇦🇷 (@Crypto_Macro) October 15, 2018
Others, including Bitfinex’ed, a long-standing critic of both Bitfinex and Tether, highlighted the outflow of BTC from the exchange and suggested others followed suit.
Another 3000 BTC withdrawn from Bitfinex.
You should follow their lead. pic.twitter.com/mma8ilKayw
— Bitfinex’ed 🐧 (@Bitfinexed) October 15, 2018
Recent figures show that Tether accounts for around 20% of all crypto transactions, and whilst the discount in Tether’s price is not unprecedented, the effect appears to be more generalised than usual at this stage.