Bitcoin has exploded higher this morning, while Tether (USDT) traded down to a low of 85 cents before recovering to around 93 cents. Over the past week you may have noticed a growing discrepancy between the price of Bitcoin on Bitfinex and on other exchanges like Coinbase. This spread reached over $900 this morning and remains above $400.
Over the same period the price of Tether, which is supposed to be pegged at $1, has begun to decline. This morning it reached a low of 85 cents, before recovering to around 93 cents.
Those trading on Bitfinex have to transact using Tether due to the exchanges banking constraints. Because Tether is trading at a discount, traders are demanding a higher price when selling Bitcoin. This explains the higher price recorded for Bitcoin on Bitfinex, and on other exchanges listing Tether.
There have been concerns for months about whether Tether is actually backed by USD or not. Those concerns have clearly escalated in the last few days. Over the past 24 hours, as Tether appeared to lose its USD peg, Bitcoin’s price rallied to over $7,800 on Bitfinex and the spread between the price on various exchanges reached nearly $1,000. Those liquidating their Tether holdings have been forced to buy Bitcoin, and in many cases if they want to move to fiat dollars, they will have to move their Bitcoin to a different exchange and sell at a lower price.
Read more: https://cvesting.com/whats-happening-with-bitcoin-and-tether/