Crypto Market Maturing: Tether (USDT) Blunder Didn’t Have Any Effect on Bitcoin (BTC) Price (Yet)

Earlier this week, the crypto community was in for a shock that shook the crypto market when the New York Attorney General's (NYAG) office pursued an investigation into controversial stablecoin Tether and cryptocurrency exchange Bitfinex that allegedly tried to cover up the $850 million loss.

Bitfinex had apparently sent $850 million to a Panama-based company that resulted in the loss of these funds. In response, the exchange used a significant amount of Tether’s cash reserves that are supposed to be used to maintain the $1 dollar peg of each USDT token.

Concerns about Tether and Bitfinex playing a huge role in driving or as some alleged manipulating Bitcoin price has been going for well over a year now.

But this time, with the report from the authorities itself, the crypto community got concerned yet again about USDT being not backed by USD reserves in the 1:1 ratio. Being a popular stablecoin choice, this would certainly have a big impact on Bitcoin price.

In response to this news, Bitcoin reacted but barely. On April 23rd, Bitcoin price went down to $5,080, but stayed above $5k, from the high of $5,500. Currently, Bitcoin is yet again in the green by 1.34 percent as BTC/USD trades at $5,200, at press time.

Chris Burniske, a partner at venture capital firm Placeholder VC, spoke about this relatively small impact of Tether fiasco on Bitcoin price as he said,

“On one hand, I’m impressed with how BTC has held given the #Tether news, on the other hand the ~$200 spread between bitfinex & other exchanges is making me queasy.”

Burniske further said, the fact that bad news caused hardly any selling off shows the strong sentiments of the market as it is something “we’d expect in a bull market.”

However, despite all the positivity or as he says “hurrahs” around the recent golden cross printed by Bitcoin, he doesn’t think we are yet in a bull market. He believes Bitcoin needs to take a drop back to the $4k level in order to create a sturdy base for the bull market that is to come.

“With BTC needing to retrace to either $4K or the 200 week SMA to have a rock solid base for the bull market to come (IMO), we could get our last great opp of 2019.”

Burniske is rather “very curious” to see how this tumultuous news plays with the brewing euphoria of announcements that are sure to come with the NYC Blockchain Week.

As the Bitfinex and Tether situation continues to unfold, investors are expected to continue to migrate away from USDT.

And as economist and crypto trader Alex Kruger says this could push the Bitcoin prices up. Moreover, it will only become clearer how much of an impact this situation would have on the Bitcoin and crypto market, in the future.

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