The unthinkable simply occurred: Bitcoin derivatives buying and selling platform BitMEX is being focused by the CFTC for quite a lot of fees, and the corporate’s CTO has already been arrested associated to the case. Now, the worst attainable situation could possibly be on the horizon: The US regulator may goal Tether and dad or mum firm Bitfinex subsequent.
Right here’s how this black swan occasion may play out, and the way it could possibly be devastating to the whole cloth of the cryptocurrency if this occurs.
Crypto Trade Giants Really feel The Stress Following CFTC Taking On BitMEX
The cryptocurrency market is at present experiencing a second of uncertainty that surprisingly Bitcoin has held up properly from. Essentially the most dominant derivatives buying and selling platform over the past a number of years, BitMEX, was simply slapped by the CFTC and US Division of Justice with a slew of fees.
Bitcoin worth fell because of the destructive information however has been holding its head above $10,500 thus far. No matter how the crypto asset’s worth is holding up, sentiment isn’t doing as properly.
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Cryptocurrency valuations are pushed by hypothesis primarily, and after the information broke, market contributors took to Twitter to do what they like to do essentially the most: speculate.
All kinds of conclusions have been drawn, corresponding to “institutional racism,” “Bitcoin is useless,” and quite a lot of different pessimistic outcomes. However there’s one situation that could possibly be particularly dangerous for the whole cryptocurrency market.
BTCUSD Weekly What Occurs If The Rising Tether Provide Takes Down Bitcoin? | Supply: TradingView
May Tether and Bitfinex Set off A Black Swan In Bitcoin?
The 2 United States entities concentrating on BitMEX, even have had their sights set on Tether and by relation, Bitfinex. The 2 companies share a dad or mum firm and a number of other different ties.
Whereas the token itself is a stablecoin tied one to at least one with the greenback, its existence has been something however steady.
Fears of Tether being bancrupt partially drove Bitcoin all the way down to its bear market backside of $3,200. Tether, which trades underneath the USDT ticker, was additionally central to a CFTC investigation involving Bitcoin worth manipulation.
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Again then, nonetheless, Tether’s market cap was simply $2 billion. In the present day, it’s over $15 billion, and due to this fact considerably extra integral to the general cryptocurrency panorama.
USDT can also be now the bottom buying and selling pair on a number of prime cryptocurrency exchanges. A complete collapse of Tether may end in a complete collapse within the larger crypto market, and Bitcoin particularly.
The extra Tether is printed, the extra analysts count on Bitcoin worth to rise. However what if all that Tether is out of the blue prone to being nugatory, or if the dad or mum firm is focused additional by the CFTC and the DoJ, very similar to BitMEX simply did?
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