The crypto community was once again shaken earlier this week when news broke regarding the New York Attorney General\u2019s (NYAG) office pursuing further investigative action into the controversial stable coin Tether and related crypto exchange Bitfinex.<\/p>\n
Concerns surrounding Tether have plagued the crypto markets for well over a year, but Bitcoin\u2019s relatively small drop that ensued after the latest development may signal growing fundamental strength behind BTC<\/a>.<\/p>\n In a press release<\/a>\u00a0that was posted on April 25th, the NY Attorney General\u2019s office boldly stated that iFinex \u2013 the parent company of both Bitfinex and Tether \u2013 may be defrauding NY-based investors who trade cryptocurrencies.<\/p>\n According to the press release, Bitfinex sent a whopping $850 million to a company based in Panama that resulted in the exchange losing access to these funds. In response to this, Bitfinex granted itself access to a significant amount of Tether\u2019s cash reserves<\/a> that are supposed to be used to maintain USDT\u2019s 1:1 USD backing.<\/p>\n This news spread throughout the crypto industry like a wildfire, and rekindled concerns that USDT \u2013 which remains one of the most popular stable coins \u2013 is not actually backed 1:1 by USD, which would undoubtedly have a massive impact on Bitcoin\u2019s price.<\/p>\n Although the Tether news certainly validates some of the concerns that are circling through the community, investors clearly aren\u2019t too afraid that anything will truly come about as a result of the NYAG\u2019s investigation, as Bitcoin\u2019s price has remained relatively stable.<\/p>\n At the time of writing, Bitcoin is trading down marginally at its current price of $5,250, down from its weekly highs of roughly $5,650.<\/p>\n Chris Burniske, a partner at venture capital firm Placeholder VC, spoke about the relatively small impact the Tether imbroglio had on Bitcoin\u2019s price, noting that the spread between BTC\u2019s price on Bitfinex versus other exchanges is making him \u201cqueasy.\u201d<\/p>\n \u201cOn one hand, I\u2019m 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,\u201d he noted.<\/p><\/blockquote>\n On one hand, I\u2019m impressed with how $BTC<\/a> has held given the #Tether<\/a> news, on the other hand the ~$200 spread between @bitfinex<\/a> & other exchanges is making me queasy.<\/p>\n — Chris Burniske (@cburniske) April 26, 2019<\/a><\/p><\/blockquote>\nConcerns Surrounding Tether Rekindled<\/strong>\u00a0<\/strong><\/h2>\n
Bitcoin\u2019s Price Barely Reacts to Tether News<\/strong><\/h2>\n
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