What might very well be the crypto market’s worst fear has come true last week. Yet somehow it doesn’t seem all that bad.
The Attorney General of New York has publicly accused Bitfinex and Tether of a scandalous cover-up involving $850 million that allegedly went missing. Bitfinex has accused the attorney general of acting in bad faith and of making false assertions. Fund transfers from Tether’s reserves to Bitfinex bank accounts have now been effectively frozen by the US government.
In the coming days and weeks, we’ll likely witness a massive investigation as the US government cracks down on one of the largest crypto exchanges. Perhaps it’s just a coincidence but the news comes just two weeks after the Bittrex exchange was denied a Bitlicense and ordered to cease operations in the state of New York.
Bitcoin and the entire crypto market did dip on the news on Thursday but what’s more interesting is that a price gap has opened between exchanges that use Tether and exchanges that don’t, they’re calling it the ‘bitfinex premium’. Basically, platforms using Tether are showing the price of bitcoin about $200 to $350 higher than the rest of the market.
Astonishingly, Tether’s peg to the US Dollar is holding up incredibly well dropping a total of two cents on the entire drama from $1.01 to $0.99.
eToro, Senior Market Analyst
China, Spain & FAANG
No More Patience
Crypto Winter is Over
Please note: All data, figures & graphs are valid as of April 29th. All trading carries risk. Only risk capital you can afford to lose.
Asian markets rose this morning, presumably on trade optimism as US-China talks resume in Beijing this week.
The European session is not going quite as swimmingly today. Very possibly due to the results of Spain’s elections, which saw a surprise victory for the socialist party.
All things considered though, markets are still pretty calm and volatility remains low as we await earnings…