The stable coin Tether is being rocked by every angle by whales cashing out, regulated stable coins (Gemini & Paxos) and Noble Banks lack of funds while trying to stay afloat in a Sea-of-Red.
An unnamed source commented,
“If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.”
Reports state that the large bag holder rejected the request. The loss of the coins stability may have a ripple effect on the cryptocurrency marketplace as a whole.
The so-called stable coin Tether who lost their auditor, Friedman LP, back in January as well as claiming that it is impossible to be audited. Who do they think that they are The Federal Reserve? However, both Gemini’s GUSD and Paxos PAX as of Sept. 10, are approved by the New York Department of Financial Services (NYDFS). It is widely believed that a fully audited and licensed stablecoin will profoundly impact the crypto market in a positive manner. It will give investors a way to retain value to their coins without being exposed to the volatile crypto market.
Side Notes on Tether
Tether lost their auditor, Friedman LP, in January of 2018 citing that it is imposable for Tether to be audited.
The CEO of Noble Banks, John Betts, was a former coworker of Brock Pierce, who co-founded Tether. Their time together involved a company called Sunlot Partners.
Tether is believed to be offered at a 1:1 ratio with the U.S. dollar, however, they have been accused of selling un-backed Tethers for the purchase of other tokens. This matters because half of all Bitcoins traded with other currencies has been against Tether.
Wells Fargo has cut ties with both Tether and Bitfinex in April of 2017. Soon after Tether hit a $2 billion market cap. Bitcoins price also soared and studies have suggested that the two coins have an intertwined relationship and Tether was used to inflate the price of Bitcoin.
What does it mean
In 2017 when Tether did well so did Bitcoin and when one had bad news it reflected poorly on the other, however, in 2018 the two coins have untethered from one another for the most part. Bitcoin still establishes the mean for cryptocurrency pricing. But this year we have also seen Tether issue more tokens without it positively affecting the Bitcoin pricing. Up until this point every time, Tether issued more tokens the price of Bitcoin went up. Maybe everyone caught on to their symbiotic relationship or maybe correlation doesn’t equal causation.
We have also watched Mt. Gox schedule its next drop of their remaining Bitcoin onto the exchanges. Normally just like Beetlejuice saying Mt. Gox three times would magically make the market nosedive but this last Breaking News spirt was uneventful and had little effect on the price of Bitcoin. So ether weak hands became strong, enough people know about whale droppings or we hit the bottom.
The Botton Line
Someone will see the value in Tether and throw it a lifeline.
Bitcoin arguably is MySpace and will fail, or Bitcoin becomes Facebook, just to run into future problems and Satoshi is called before Congress.
Or Etherium usurps Bitcoin in the fog of war.
“Et tu, Buterin?”