Bitcoin and crypto traders are getting ready for the third halving that is scheduled to happen this month – an event that will halve the amount of new bitcoins that enters the market.
This week, the bitcoin price surged to $9,400, a level not seen since February, this year. This, making bitcoin a strong candidate for the 2020’s best-performing asset.
Despite the fact that the halving is a bullish event for bitcoin maybe the last surge by 20% in a week was caused by something else.
Earlier this week, just before the bitcoin surge, a large amount of USDT was transferred in a single transaction from an unknown wallet to Binance crypto exchange.
Tether is the company behind USDT which is a stablecoin pegged to the U.S. dollar that claims to keep one dollar for every USDT issued.
The amount of tether which is worth more than $50 million US dollars was transferred to the Binance exchange just hours before the big pump that happened on Wednesday.
The large transfer was reported by Whale Alert, a bit that records large cryptocurrency transactions.
— Whale Alert (@whale_alert) April 29, 2020
Compared to the billions in trading volume bitcoin has every day, someone might think that a $50 million is a tiny amount of money, but we must not forget that 95% of the trading volume is fake and a $50 million matters to acc some billions of dollars to bitcoin’s market cap.
In March, Tether Ltd, which is the company that controls the stablecoin USDT and shares shareholders and staff with Bitfinex crypto exchange, issued USDT tokens worth $1,5 billion.
On Wednesday, 29 April, Coinbase and Bitmex were unable to cope with the traffic on their servers during bitcoin’s sudden rally.
It’s 2020 and servers at Coinbase and BitMEX still can’t handle bitcoin volatility.
— Zack Voell (@zackvoell) April 29, 2020
Meanwhile, Bitfinex seems to have been prepared as their chief of technology, Paolo Ardoino, which is also CTO at Tether, said in a statement:
“On Wednesday we witnessed extensive buying activity and the high level of scalability and liquidity evident on our platform made us able to seamlessly service all these requests,”
Right now, there are 6.3 billion USDT tokens in circulation compared to only 18.3 million bitcoins.
A research conducted by – John M. Griffin, Profesor at the University of Texas at Austin and Amin Shams, Profesor at the Ohio State University, Fisher College of Business – pointed to the fact that half of the bitcoin value during March 2017 until March 2018 was created by Tether, throwing doubts that the epic bull run of 2017 was not an organic growth.
Tether was accused for market manipulation in a class-action lawsuit back in October 2019. Many see tether claims about their reserves not credible, this is why there were many calls from the crypto community to audit their reserves from external auditors.
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