Tether Could Be a Time Bomb for Crypto Market

Tether Could Be a Time Bomb for Crypto Market

According to coinmarketcap.com, 20th most valuable cryptocurrency Tether, is currently a hot topic in the crypto ecosystem.

If we look at Tether closely, this coin aims to have a dollar in the bank corresponding to each and every currency of Tether(USDT) in the circulation. In this means, crypto market can elude the difficulty of finding a bank to cooperate and can embody these cryptocurrencies within itself and in case of a price decrease, which can allow investors to position their investment in dollars.  However, as the market cap of the Tether skyrocketed, users started to wonder, if this money actually being kept on the bank or not.

Especially, twitter user @Bitfinexed and also a great deal of other users claim that this promised money does not exist and it creates a bubble in the crypto ecosystem. According to the allegations, even if Tether had actually been created for this purpose, it was later bought by Bitfinex and turned into a manipulation coin. It is also claimed that especially after causing loss of millions of dollars worth customer money due to a big hack, Bitfinex couldn’t make any direct payment to customers and as their made up gift coins didn’t create the desired effect, they decided to buy Tether, after which the transition for Tether has started. Hereby the company aimed to seem as if they make up the customer losses, so that they can pull the company out of fire.  In fact, some even associated the price increase of Bitcoin with the swelling of market through Tether.

In respect to these allegations, company defended itself only by the statement “claims on social media are not true instead this is a perception operation”. Also, they announced that a detailed explanation would be made later.

However, within this period @Bitfinexed and the other users are continuing to post and publish documents which support their claims and they receive public support.

Undoubtedly, such a scandal would cause a massive collapse of the largest crypto money exchange Bitfinex, which undertaken alone 9.30 percent of Bitcoin’s transaction volume and also, it would bring a great dissolution in the whole crypto market. So, it is obvious that the topic needs to be clarified soon. Otherwise this would create a bubble and once the scandal promulgated, it may damage the whole market in a way that cannot be recovered for a long time.