Tether and its impact on the cryptocurrency market
Bitcoin is down 70% from its December highs and people are beginning to look for ways to increase the market and prop up Bitcoins price.
Guess what? Tether has found a way to do both.
Tether, owned by the largest bitcoin exchange Bitfinex, is a cryptocurrency that’s purpose is to mimic the US Dollar. However, some suspicious Tether transactions have many looking into the real motive behind printing of Tether.
“People were trading Tether out to the fifth decimal point. Tether which is worth a dollar, they’d be trading amounts that make no sense,” said Evan Lorenz on Grant’s Interest Rate Observer Podcast. “These amounts were matched on the other side which trades in other cryptocurrencies that seem to push the price of those currencies up and not really push the price of Tether at all.”
The reason that Tether and this suspicious activity is such a big deal is because this is not your traditional money exchange. There is no real security or regulation behind it.
In a must-listen podcast, Lorenz speaks about the significance it has and what this means for crypto and the market:
“A lot of the cryptocurrency exchanges can’t get past the banking system. The reason why is, banks in order to take a client, they have to cover ‘know your customer’ and take precautions for anti-money laundering.
“So, what happens is Tether substitutes for dollars for grease that kind of pushes the entire market along. It’s a wonderful regulatory work around that may be built on very shaky foundations.”
For FULL analysis: SUBSCRIBE to Grant’s Interest Rate Observer Podcast