Sudden price drop shows largest 'stablecoin,' Tether, isn't so stable after all

Marco Green
October 18, 2018

Stablecoin Tether (USDT) saw its price take a tumble on Monday, October 15, 2018, temporarily hitting an 18-month low as Bitcoin (BTC) spiked to almost hit $8,000 on Bitifnex.

Drama with Tether isn't new, but until now USDT has mostly maintained its $1 peg.

The leading stablecoin by market capitalization, which may face competition from recently launched counterparts, dropped by 2 percent in the 24-hour trading window yesterday. One Tether token can now be purchased for $0.97 or 0.00014704 BTC on major cryptocurrency exchanges including Binance, MBAex, Bitfinex and ChaoEX. At that time, Bitcoin nearly crossed the $7,000 mark raising positivism among investors of who have been grappling with depressed gains, volatile prices, and growing government regulation.

Critics have long argued that Tether is a scam - a claim bolstered by Tether's seeming refusal or inability to release an audit - that artificially inflates the price of bitcoin.

The data from CoinMarketCap shows that the daily trading volume of BTC has spiked from $3 billion to $7 billion in the last day (24-hours), more than doubling. The Bitcoin price for DATA now, is 0.00000561 BTC. It seems that the suspension coincided with a Bitcoin premium on the exchange which found its peak last night. The Bitcoin price for BTCP now, is 0.00039386 BTC.

Zilliqa (ZIL) traded up 4.4% against the dollar and now trades at $0.0343 or 0.00000512 BTC. The Bitcoin price for NEBL now, is 0.00029613 BTC.

IOStoken (IOST) traded down 0.3% against the dollar and now trades at $0.0396 or 0.00000526 BTC.

Stellar (XLM) traded 5.4% higher against the dollar and now trades at $0.23 or 0.00003399 BTC. Consequently, Bitcoin exchanged at $7,500 United States dollars on Bitfinex. The Bitcoin price for EVN now, is 0.00000936 BTC. Alt coins such as Gemini Dollar and TrueUSD are also up, as traders pulled back from Tether.

As indicated by CryptoCompare.com: "USDT is a cryptocurrency asset issued on the Bitcoin blockchain via the Omni Layer Protocol". Investors can then use their newly-acquired Ethereum or Bitcoin to buy Tether using one of the aforementioned exchanges.

Interestingly, Binance is one the largest holders of USDT tokens, with over 768.5 million in its reserves, according to a wallet richlist posted on Tether.to.

Fidelity launching a new investor trading and custodial exchange.

Volume rushed back into the crypto market this morning after Binance tweeted out a report from Token Insight giving Tether an investment grade rating of B (On the 10 point scale from AAA to D). This pushed the USDT price for Bitcoin as high as $7,800 briefly on the BitFinex exchange, as user tried to rid themselves of the crypto, fearing it becoming worth even less - that was a Premium of over $1,000 on what it would have cost to buy the same bitcoin with fiat via Coinbase.

Other reports by Click Lancashire

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