Crypto Exchange Bitfinex Restarts Fiat Deposits Claiming 'Improved' System

Daniel Fowler
October 18, 2018

At its highest point, the price of Bitcoin reached $7,500 on Bitfinex.

There is no shortage of rumors surrounding the reasons for Tether's sudden decline in price. First, Bitfinex, the exchange that uses Tether as a stablecoin, changed its banking relationship to HSBC from Puerto-Rico based Noble Bank, which is said to be searching for a buyer.

Amid this heightened nervousness about Tether's ability to maintain a peg with the United States dollar, and thus perform the task for which it was created, the last 24hrs has downtime at KuCoin start what appeared to a run on the Stablecoin, leaving it worth under $0.94 at times. The price of bitcoin for these pairs has spiked as a result of the sell-off, but if you sold USDT for BTC and then attempted to resell this BTC for USD, the arbitrage opportunity would be nullified by the price differential between BTC/USDT and BTC/USD pairs.

Tether (CURRENCY:USDT) traded down 2.9% against the USA dollar during the 1-day period ending at 7:00 AM Eastern on October 15th. Bitfinex is a major Crypto exchange that offers nearly all of Tether liquidity to the US Dollar.

"Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this". Officials at Binance are reporting that traders have started to build interest in newly emerging stablecoins that have the support of banks and authorities. Tether and Bitfinex have dodged many bullets in the past.

A little-known token may be fueling Bitcoin's rise.

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Tether's losses are bitcoin's gains. In January of this year, Tether announced it had engaged the auditing services of Friedman LLP in hopes to "provide an interim analysis of [Tether's] cash position and our issued and outstanding tokens, as part of ongoing efforts to further professionalize the transparency mechanisms of Tether Limited". According to the charts on CoinMarketCap, there is more than 20% uprooting in Tether's valuations in the last week.

"Faith in Bitfinex's financial situation and ability to fully back Tether has been a recurring question", Chu said.

At the time, global exchange rates for BTC prices hit an average high of $6,960, the highest in the last five weeks.

Binance has clarified that they do not have any plans of delisting Tether amidst rampant rumors and volatility. Retail investors are already exchanging their Tether holdings for Bitcoin and other top coins, which have also seen an impressive rally in the past 24 hours.

Last Thursday, when Bitfinex revealed that fiat deposits are paused, some investors became suspicious due to the lack of details from Bitfinex regarding the mentioned "complications" that made the exchange halt fiat deposits. Momentarily, the price of Tether crashed to sub-90 cents with the entire market rising as USDT was being emptied and money was pouring back into the rest of the market.

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