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Controversy Surrounding Tether Builds After Coin Circulation Spikes in Wake of Subpoena

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Embattled startup Tether increased the supply of USDT tokens dramatically in December after being handed a subpoena by federal regulators, raising fresh suspicion the company has been manipulating the bitcoin market.

USDT Circulation Spikes

Data provided by Bitcoin.com and CoinMarketCap have confirmed that the supply of USDT tokens has risen by about one-third since Dec. 6, the day the U.S. Commodity Futures Trading Commission (CFTC) issued the subpoena. In January alone, the number of USDT tokens released to the market was 850 million.

The sharp increase in new tokens coincided with a record rally in bitcoin and other cryptocurrencies in December and early January. Although many in the cryptocurrency community have outed Tether as a scam, a wholesale collapse of the company could have a devastating impact on the market.

On Jan. 24, a website by the name of tetherreport.com claimed that the digital currency was responsible for 48.8% of bitcoin’s price rally in 2017. The authors, who remain anonymous, concluded that more Tether is created when the price of bitcoin falls.

On the flip side, there’s strong reason to believe that the company’s collapse would have the opposite impact. Just as Tether propped up the market, it could also be responsible for a 30% to 80% price correction, the authors claim.

Controversy surrounding Tether has been partly responsible for the market’s sharp correction in recent weeks. Combined with regulatory uncertainty and a series of cyber attacks targeting cryptos and ICOs, the digital currency market is down more than 50% from record levels .On Friday, the price of bitcoin fell below $8,000 for the first time since late November, when the market was heading in the opposite direction.

At the time of writing, the total supply of USDT tokens was 2,217,140,914. Each token is priced at $1.00, giving the cryptocurrency a market cap of more than $2.2 billion.

Dollar-Backing Under Scrutiny

Unlike other cryptocurrencies, Tether’s USDT token is supposedly pegged to the dollar, making it an attractive substitute for the greenback. Although the company has produced documents disclosing its holdings, it has not provided conclusive evidence of its financial backing. A document posted to the company’s website shows a balance of $443 million as of Sept. 15, although no details about the bank or account holders were provided.

Investors recently learned that Tether is run by the same CEO as Bitfinex, one of the world’s largest cryptocurrency exchanges. Like Tether, Bitfinex was also subpoenaed by U.S. regulators in December. That both companies are run by the same management has raised suspicion over collusion in propping up the bitcoin market.

Analysts cited by CNBC have claimed that a growing number of USDT has shifted to the Bitfinex exchange in recent months. This could be to cover up the exchange’s solvency woes.

Bitfinex was the fifth largest crypto exchange on Saturday when measured by market volume. The platform processed nearly $430 million in bitcoin trades, according to CoinMarketCap. It also facilitated the buying and selling of $194 million worth of ether. Upbit was the top ranked exchange, followed by Binance, OKEx and Bithumb.

Many investors are hoping for a swift resolution to the Tether controversy, even if it ends in a debacle. Their rationale is simple: if Tether is manipulating the market, it should be stopped so that the forces of supply and demand prevail. In the long run, this will only serve to strengthen the market.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 738 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Ethereum Price Analysis: ETH/USD Bearish Flag Structure Eyed

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  • Ethereum price has stabilized but is moving within a dangerous range-block formation.
  • ETH/USD via the daily chart view is forming a bearish flag pattern.

ETH/USD price action has stabilized over the past five days, and is moving within a narrowing range. This movement appears to be somewhat expressing potential downside risks after the selling pressure seen in the second week of January. As a recap, the price was supported in its move north from mid-December 2018 up to 7th January. An ascending trend line was proving necessary comfort in this trend higher, however markets bears managed to force a breach. The support gave way, opening the door to a fresh wave of selling from 8th January.

ETH/USD daily chart.

Around 30% of the bull run that was seen in the above-mentioned period has been reversed. Vulnerabilities continue to linger, as ETH/USD trades around key daily support. The level to be aware of is $116.70, which is vital ahead of the big psychological $100 mark. A breach could see a test of daily support at $102, with the price likely to consolidate between here and $116. Given prior behavior around these areas, ETH/USD may be forced to retest the December 2018 low, $83.10. This would likely be the case, should a return of bullish momentum not see a pickup in pace soon.

Constantinople Hard Fork Delay

The stability in price is surprising given the let down for the community with regards to the heavily anticipated Constantinople hard fork. As reported by the CCN team, Ethereum’s core developers called for the Constantinople upgrade to be delayed. This was just some hours before the hard fork was scheduled to go live on the network. ETH/USD fell double-digits on the back of this being postponed. A drop of 10% was observed.

Technical Review – ETH/USD

Looking via the daily chart view, price action is forming a bearish flag pattern structure – the pole which is seen with the fall from 7-10th January. In terms of the actual flag, this is the current range-block viewed. Upside resistance can be seen just ahead at $135, and lower support noted the mentioned $116.70 area. The next major areas of support are the $102 daily pivot point, the December 2018 low of $83.10, and then lastly, the May 2017 low of $65.85.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 107 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Cardano Price Analysis: ADA Bulls Set for Another Retest of Big Supply Area

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  • ADA/USDT trading firmly within the green on Wednesday, outperforming its peers.
  • Cardano Shelley upgrade is heavily anticipated across the community.

The ADA/USDT pair was seen holding decent gains in the session on Wednesday, up as much as 5%. The bulls are looking at resuming their decent upside momentum, which was seen through mid-December early January. In terms of that rally seen, the price gained a whopping 90%, moving from around $0.02793 up to a high print at around $0.05368 on 10th January. This was the highest-level ADA/USDT had reached since 19th November.

ADA/USDT daily chart.

The bulls had the wind taken out of their sails after failing to breakdown a known area of supply. This can be seen tracking from $0.04900 up to $0.05400. The price has not been above this level since 19th November 2018, which was a period of heavy selling. Buyers have faltered here on two occasions recently – 24th December 2018 and 10th January. It will not be an easy area to break down; however, upside potential is chunky should it be broken down.

Project Shelley Imminent

The eagerly awaited Shelley update is very much quickly nearing its release from the Cardano foundation. It is set to be launched in the coming few weeks, as can be seen via their roadmap countdown clock.

This update is significant as it will make the Cardano blockchain fully decentralized. The Cardano blockchain is currently within the Byron phase. In terms of the Shelley upgrade, it will additionally mark the release of Cardano 1.5. The foundation provides the following insight from the detailed roadmap, “As we progress through Shelley, work will be done that contributes to stability, interoperability and governance. Throughout the arc of development, Cardano’s protocols will increase in complexity, interdependence and use more exotic cryptographic primitives”.

Technical Review – ADA/USDT

ADA/USDT 4-hour chart.

A near-term upside challenge is seen tracking from $0.043500-$0.045000, via the 4-hour chart view. Over the past six sessions now, the bulls have failed to break this area down. Further north of this, a heavier zone of supply can be observed from $0.04900 up to $0.05400, as detailed earlier.

If the bulls fail to move north of the mentioned areas, then key daily support levels should be noted for potential comfort. Eyes would be on the following levels: $0.03900 (13-14 January low), $0.03550 and then finally $0.027600 (7-16th December 2018 low area).

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 107 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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STEEM Coin on the Move While Steemit Loses 20 Million Visitors in Six Months

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One of the three currencies which fuel the Steemit blockchain-based social media site, Steem (STEEM) gained 22% in the previous two days. Despite the increased price movement in January, monthly visitors and unique account creations continue to plumb new yearly lows on the Steemit social media website.

STEEM Price

STEEM’s recovery has been slow in coming – the coin gained 43% from December into January, however most of that came in the last forty-eight hours. Compare that to major and mid-cap altcoins such as Tron (TRX), Zilliqa (ZIL) and Augur (REP) which gained over 100% in that time, and you see a major discrepancy.

From Monday through to Wednesday STEEM went on a 22% run which carried the coin price from $0.249836 up to $0.306033. Trades against Korean won on the Upbit exchange accounted for more than 40% of the day’s trades, or around $1.2 million of the $2.7 million daily total.

Steemit Cools Down

After suffering the indignity of laying off a majority of its staff back in November, Steemit continues to hold on despite plummeting numbers.

Remarkably, the Steemit social media site lost almost 20 million monthly visitors in the last six months – a 61% drop off from the 30.8 million visitors in July, to the current 11.9 monthly visitors according to SimilarWeb. New account creations are also down 83% in the last six days alone, however statistics show that new users tend to flood in whenever the coin price pumps – even if just for a brief time.

CCN reported back in May of 2018 that Steemit had surpassed one million accounts created on the blockchain. This was a startling figure at the time, and grabbed a lot of headlines. However, Steemit statistics from the time suggest the number of unique users was actually much less – closer to 150,000 according to this chart from Steemit’s @arcange.

Follow the Money

The same chart shows that January of 2018 remains Steemit’s most successful month. The site gained close to 120,000 new users in the sixty days leading up to January’s all-time high, when the coin price climbed as high as $8.57.

As the coin fell to a twenty-month low in December, unique accounts on the blockchain also fell to eighteen-month lows in the process. A major increase to new account creations was seen on January 9th, as STEEM went on a similar 23% price spike, and 4,108 new users flocked to Steemit in one day.

Stats courtesy of Steemit’s @penguinpablo

By six days later, new registrations had fallen back to 695 per day, as STEEM’s gains from the previous few days were wiped out.

Steemit launched back in early 2016, and has divided opinion since its inception. Check out this recent primer for an up to date summary of Steemit and its features.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 123 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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