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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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4.6 stars on average, based on 499 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Stellar Price Up 77% for the Week as Protocol Gains Sharia Compliance

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The daily volume for the entire crypto market has jumped 144% in the last three days, up from $8.7 billion on July 15th to the current $21 billion at the time of writing. Every coin in the top ten is glowing green, with Stellar in particular showing tremendous growth for the day.

Earlier this morning XLM coins were trading for $0.23. Fast forward just over twenty hours and that price now sits at $0.318 – that’s a 38% increase for the day, and sets Stellar apart as the best performer in the top ten, run close only by Cardano’s 25%+ growth in the same time frame.

Just six days ago, on July 12th, one unit of XLM was valued at $0.179, meaning today’s price marks 77% growth for Stellar in less than a calendar week. Stellar has now smashed through the monthly high, recording its highest market value since May 22nd.

Stellar’s highest concentration of trade movement has come on Binance today, with BTC and USDT being popular trades. The Korean touch is also felt with around 18% of Stellar’s trades coming against KRW on the Upbit and GOPAX exchanges. The overall daily volume for XLM is currently 425% higher than it was this time last week.

Sharia Compliance

According to a Reuters press release which dropped just last night, Stellar has just received a certificate of Sharia compliance, one which will allow them to focus on bringing the 1.6 billion Muslim population onto the blockchain, so to speak.

Muslim adoption of cryptocurrency has always had to contend with religious money laws, but this recent development could be the watershed moment which changes everything – not just for Stellar, but the for the entire crypto market as it spreads across new lands.

Mansoor Ahmed, assistant general manager at Shariya Review Bureau, said that the technological aspects were never a sticking point:

““For the blockchain technology there was no issue, the main thing we needed to consider was the use of the underlying cryptocurrency”

The Islamic approach to finance is one that emphasizes real-world assets, and tangible value. The accumulation of interest, for example, is forbidden in Islamic society, and so it’s easy to see why there were concerns about cryptocurrency to begin with.

Coinbase and IBM

Stellar and Cardano were two of the coins mentioned in the Coinbase tweet earlier in the week, and the spikes they experienced at the time have compounded over the last 24 hours.

Meanwhile, Stellar’s close relationship with IBM continues to flourish this week as IBM launch their own stablecoin on the Stellar platform.

Stronghold USD is intended to be Stellar and IBM’s answer to Tether; although unlike Tether, one would expect much greater transparency from a company like IBM.

Jesse Lund, IBM’s vice president of Global Blockchain told Reuters:

“IBM will explore use cases with business networks that we have developed, as a user of the token. We see this as a way of bringing financial settlement into the transactional business network that we have been building.”

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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4.4 stars on average, based on 23 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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Cryptocurrency Market Cap Approaches $300 Billion as Bitcoin, Altcoins Continue Surging

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Cryptocurrencies were nearing an important psychological milestone Wednesday, as surging trade volumes propelled the market to its highest level in five weeks.

Market Update

The digital asset market has tacked on over $26 billion in the last 24 hours to reach $296.1 billion, according to CoinMarketCap. At this pace, $300 billion is likely within reach in the coming day. Total market prices have been capped below that level since June 12.

Daily trade volumes on global exchanges now exceed $20 billion for the first time since May. Three exchanges processed more than $1 billion worth of trades.

Bitcoin, which was the main catalyst for the rally, has retained a 43% share of the total market. The largest cryptocurrency by trading volumes and market cap is up nearly 11% over the past 24 hours to trade at $7,741. The bitcoin price peaked just below 7,500 overnight.

Altcoins have also picked up the pace, with all the majors reporting solid gains. Ethereum was up 6% as prices approached $500. Ripple XRP gained almost 9% to $0.513.

Stellar Lumens led the double-digit gainers with returns of 28.4% over the last 24 hours. XLM now sits at $0.296.

Cardano’s ADA coin jumped 19.6% to $0.181. Bitcoin cash, the no. 5 currency, rose 10.1% to $872.

Bitcoin Volumes Double

Bitcoin’s trading volumes have virtually doubled over the past week, as positive headlines surrounding adoption and regulation triggered renewed interest in the cryptocurrency. Hacked previously reported that daily trade volumes of $4 billion or greater are needed to sustain a meaningful rally for the bitcoin price. On Wednesday, bitcoin turned over nearly $6.6 billion.

Tether – a cryptocurrency pegged to the dollar that is often traded against bitcoin – continues to exhibit higher than normal trade volumes. On Wednesday, USDT trades generated $4.2 billion in volume, which is an all-time high.

Unlike previous rallies that appeared technical in nature, the latest uptrend was sparked by news that a trillion-dollar asset manager was exploring ways to enter the cryptocurrency market.

BlackRock, which controls over $6 trillion in assets, has assembled a working group to explore crypto adoption. In an interview, CEO Larry Fink said his firm is a “big student of blockchain” but that he does not see “huge demand for cryptocurrencies” at the moment.

Fink has changed his tune compared to last year, when he called crypto assets “an index for money laundering.”

Coinbase, a large and influential digital currency exchange, has also fueled positive sentiment after the firm said it had gained regulatory approval to begin listing security tokens. Last week, Coinbase also said it had short-listed five cryptocurrencies for future consideration on its exchange.

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 499 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Altcoins ADA, BAT, XLM, ZEC and ZRX Enjoy a Coinbase Pop

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The Ethereum price wasn’t able to hold onto its gains today despite seemingly marching toward the $500 level on Monday, as market technicians have predicted that the downward trend remains intact despite yesterday’s rally. Meanwhile, daily trading volume in the cryptocurrency market is hovering at about $13.8 billion compared to its 2017 peak of more than $50 billion, as per CoinMarketCap data cited in reports.

The more trading in digital currencies, the higher the revenue of bitcoin exchanges like U.S.-based Coinbase, which incidentally is in the process of adding a handful of altcoins. While it may seem that Coinbase’s answer to the weaker average trading volume these days is to bolster its platform with more coins, a leading exchange executive said that’s not the case. Coinbase Vice President and General Manager Adam White told CNBC that customer demand fueled the decision.

“Certainly volumes today are lower than they were at the end of Q4 and January. The idea behind adding new assets is very simple: our customers want it,” White said, adding that more than 20 million individuals are signed up on the exchange in addition to institutional investors, the latter of whom are demonstrating “unprecedented” interest in the space.

The assets that Coinbase is moving toward adding include Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC) and 0x (ZRX). And while these coins are likely to be directed to the exchanges indexes, their presence does not reflect a bullish position on the part of Coinbase, White noted. Nonetheless, let’s take a look at each of them.

Cardano (ADA)

eToro exchange just published a report focused on Cardano, referring to the smart-contract-fueled platform as “Blockchain 3.0.” Cardano remains in the nascent stages but it’s designed to pick up where the Bitcoin and Ethereum networks fall short on scalability. ADA has advanced about 13% since Coinbase’s Friday announcement. But Cardano has shed more than three-quarters of its value since the beginning of the year.

Basic Attention Token (BAT)

Basic Attention Token describes itself as a “blockchain-based digital asset” startup. BAT is advancing more than 4% today and has been among the top performers since Coinbase announced plans to add the coin. BAT has added 33% to its value since the Coinbase announcement.

Stellar Lumens (XLM)

Stellar is advancing about 1% today and has tacked on about 28% since the Coinbase announcement. The coin also got a boost when the SEC Thailand said that Stellar would be an acceptable form of payment by iPO issuers. A Stellar follower on Twitter joked that soon XLM would be accepted at every McDonald’s.

Zcash (ZEC)

Privacy coin Zcash is up almost 2% today and its value has ballooned by 22% since the Coinbase announcement. ZEC was also added by fellow U.S.-based cryptocurrency exchange Gemini in recent weeks, so it has the tailwind of both listings.

0x (ZRX)

The thing about 0x is that it already had a relationship with Coinbase ahead of the listing announcement. So much of the enthusiasm for a listing may have already been baked into the price. ZRX is shedding some ground today, down about 1%, but it’s up about 48% since last week.

Disgruntled XRP Investors

Coinbase was accused by some XRP investors, a community that has been waiting for their Coinbase day in the sun, of price manipulation in the altcoin the exchange announced it’s exploring now.

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 23 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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