It would be an understatement to describe the volatility of Bitcoin last week as challenging.. Bitcoin fell to $ 9,200 at its lowest level, but luckily, thanks to a green candle, it was saved and returned to five-digit prices.. This green candle was created thanks to the $100 million worth of Tether released three days in a row.. Tethers are currently fueling the Bitcoin market, but what happens when the fun is over? The fresh capital lost would be catastrophic if regulators were to step in or Tether were to go out of business.
Is Tether the Savior or the Sinner?
The Bitcoin community has pretty mixed feelings about Tether.. Thanks to Tether, which functions as a kind of Dollar, the crypto money market has the opportunity to breathe in the most difficult moments, but if this money from Tether is cut, the crypto money markets will suffer from a shortage of new money.. While Bitfinex manages Tether, which is pegged to the dollar, exchanges such as Bittrex and Kraken also rely on Tether.. So if something happens to Tether, something happens to the market.
The amount of new Bitcoins created every day is worth about $18 million. Miners need to sell most of these coins to cover expenses. This means that $18 million worth of new money must enter the market every day to maintain current prices.. $400 million worth of Tether has been launched in the past four days, and the Bitcoin price still hasn’t recovered fully, at least, and it’s a bit annoying. If Tether’s new money had not been brought to the market, this week’s decline would have hurt much more.
Don’t Lose the Faith
In the short term, Tethers are the ones caused by uncertainties about legal regulations and negative news. they prevent the market from experiencing a very serious decline in the declines.. There are some doubts as to whether Tethers are really backed by USD, but there is a comment on the subject:
“Tethers are not really ‘backed’ by US Dollars, they are backed by trust in Bitfinex.. Just as the US dollar is not backed by a physical asset, but by the trust in the US economy.. What happens to the USD if the FED cuts the huge volume coming out of the printing press?”
“At current prices, Bitcoin’s 18 million dollars are needed to keep the current price. Needs $ worth of new & flowing money. Still, $100 million comes in daily in the form of Tether. If that Tether printing machine were to break, cryptocurrency prices would be bloodbathed.”
Tethers are real as long as the cryptocurrency community believes Tethers are real. At least as real as any currency that has survived since the abolition of the gold standard. But… right now no one believes Tether is taking $100 million from customer payments and converting that much money into USDT. How do we say it… Such a thing does not happen.
Don’t Let That Day Come
As we said, if everyone believes that Tether is real, Tether is real. Until it’s time to pocket cotton balls. More than $1 billion worth of Tether has been produced in the past month alone. If Tether does not have the amount in the bank to meet this value… As Coin Bulletin, we have to work hard because there will be a lot of bad news to be made.
Join our Telegram channel to be informed about all developments and posts!