This Week in Brief: Bitcoin Dump, BitFinex, Tether, Yelp, Ethereal Summit
Written by Dalmas on April 28, 2019
Well, the week was as it was—turbulent, full of rumors, innuendos, threats of law actions and above everything, price resilience. Bitcoin, despite all the drama surrounding Tether Limited, BitFinex and the parent company in iFinex, is nonetheless one of the top performing digital assets trailing Binance Coin, which is up 400 percent in the last few months.
Even so, analysts as well as investors are optimistic and thanks mostly to the direct correlation Bitcoin has with altcoins, a dip or a rise often have a magnifying effect. As a result of Apr-25 events, Bitcoin is back towards the $5,100 and following suite are Ethereum (ETH), Bitcoin Cash (BCH) all other top-5 asset aside from range-bound Ripple (XRP). But what exactly is the case with the New York Office of the Attorney General.
Thing is the office is known for suing entities contravening NY spelled out laws with iFinex, Facebook and NRA being the latest. But, the case around iFinex is the decision of BitFinex to use $700 million of Tether Limited reserves to plug an $850 million hole, which the exchange is yet to recover. Because of that, BitFinex had to use USDT reserves for liquidity and to to in good terms with clients.
The problem now is that USDT is backed by the very reserves and technically that is supposed to affect the 1:1 peg against the USD. Well, it was a while back and no-one noticed. It also simultaneously coincided with Tether minting another $300 million calling into question their operation practices. Take note that in the last few months, the exchange has been entangled in several scandals including their problems with banks which consequently affected withdrawals temporarily triggering a coin flight.
If anything, if the NY OAG decided to wash iFinex and BitFinex’s linen in public and as they say uncover fraud attracting heavy fines, then the exchange–which is part of the crypto ecosystem—is the source of 5 percent of Bitcoin’s daily volume, will take a hit and well, BTC may drop.
Regardless, other events like Yelp adding a filter on iOS allowing customers find merchants accepting cryptocurrencies, is a reflection of acceptance. Merchants are gravitating towards crypto like never before.
And it’s not hard to see why. Crypto are global and with Point-of-sale companies like PundiX, CoinBase in collaboration with Visa and Crypto.com previously Monaco, it is now so easy for them to part of the movement. Then again we have Microsoft’s involvement at Ethereal Summit in New York where rewards of up-to $67,000 payable in Dai stable coin is out for the developers planning to re-configure the world’s financial system.