n Cryptocurrency research firm Diar indicates that the market capitalization for USD stablecoins has hit all-time highs and exceeded billionn
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Tron (TRX) Blow, Tether (USDT) Reason for Reward Postponement
- Tron (TRX) prices ranging
- Justin Sun postpones USDT rewards in light of USDT troubles
Technically, Tron (TRX) is in an uptrend, but before 4 cents, bulls must clear 3.1 cents. Spurring that may be fundamentals, but with Justin Sun postponing USDT rewards, it may be a while before TRX demand rise.
Tron Price Analysis
Fundamentals
The circus around iFinex promise to be disastrous for BitFinex—a trusted exchange laden with scandals, and Tether Limited—caught lying about reserves backing USDT. Note that this will also be consequential for company leaders who despite all this may not be extradited to the US to face justice because it is USDT fraud, not USD. It is also contagious, with reverberations beginning to permeate through the crypto ecosystem.
If anything, it is about USDT and less than a month after minting 0 million, Tron’s Justin Sun is backing off from his plan of rewarding the community. In their game plan, USDT would launch in Tron as a TRC-20 token allowing smooth transaction with Tron-based dApps.
Besides, USDT as a TRC-20 token would make it easy for institutional investors to choose the network over competitors. However, with this melee, Justin Sun is postponing his plans saying:
“Given the recent news about both BitFinex and Tether, I will be postponing our planned USDT rewards program until more information becomes available. It was by no means an easy decision. My team and I have been focused for months on bringing stability and liquidity to the TRON community. We are still committed to doing what’s best for the network and will examine our options after hearing how events unfold with BitFinex and Tether.”
Candlestick Arrangement
Overly, Tron (TRX) prices are ranging inside a 1 cent zone. With primary support at 2.1 cents or Jan 14 lows, bulls are struggling to close above 3.1 cents despite a bullish trend. Unless otherwise there is a spike in participation forcing TRX to rally above immediate resistance at 2.7 cents, yesterday’s bull bar off 2.5 cents would be null in our analysis.
Since TRX/USD is ranging, patience is all-important. Moving on, we recommend taking a neutral stance until TRX rally past 2.7 cents triggering short-term buys aiming at 4 cents. If not and there is a meltdown, TRX could retest 2.1 cents. However, any drop below that mark invalidates our bull plan.
Technical Indicators
Reversing losses of Apr-25 is essential. With higher highs in the last few days as prices move towards equilibrium, break above 2.7 cents must be with high volumes exceeding 13 million. That will confirm buyers of Jan 14 and Mar 23.
Chart courtesy of Trading View
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Tether (USDT) Promotion, Bitcoin (BTC) Likely to Print Higher
- Bitcoin (BTC) in an uptrend but down 4.3 percent
- Tether’s reserve low and the peg isn’t 1:1 against the USD
It is now emerging that USDT’s reserves don’t tally with what’s in circulation. That means Tether Limited is lying and investors may flock to safety driving Bitcoin prices up. At the moment, BTC is down 4.3 percent from last week’s close.
Bitcoin Price Analysis
Fundamentals
Because of all the drama, investors are reluctant. However, that is not to say they are bearish. While there is a tinge of bearish sentiment, technical and other fundamental factors support Bitcoin bulls. Expanding that and realizing that Bitcoin has a positive correlation with the altcoin market, it is easy to conclude that the market, in general, is recovering.
If anything, a combination of fundamental reasons may spur the next wave of higher highs above important resistance lines. Presently, BitFinex and Tether may be a systemic risk or blessing. With the admission that Tether Limited has no reserves to back the stable coin 100 percent, investors may decide to liquidate their stable coin and convert them to Bitcoin, alternative currencies like PAX, or fiat en mass, heaping pressure on USDT but supporting BTC.
On the other hand, the market may collapse if the NY OAG decides to impose hefty fines on BitFinex for their fraudulent activities. Zoe Phillips, of law firm Morgan Lewis, delivered the bombshell saying collaborated by BitFinex counsel:
“Tether’s reserves of cash and cash equivalents alone (without the line of credit) would cover approximately 74 percent of the outstanding amount of tether.”
Candlestick Arrangement
At the time of press, Bitcoin (BTC) is dominant, controlling 54 percent of crypto trading. Nonetheless, it is stable, down 4.3 percent in the last week. Although we are bullish on the asset, it is imperative that bulls muster enough momentum to drive prices above ,500, in a trend continuation phase.
That means reversing loses of Apr-25, ideally with high transaction volumes, and confirming buyers of Apr-2. By doing so, Bitcoin would be free from a temporary consolidation.
On the other hand, should there be lower lows countering yesterday’s upswings then it is likely that bears of Apr-25—which is wide-ranging with high participation levels—would drive prices below 50 invalidating our short-term stance. As a result, it is Bitcoin (BTC) may drop to ,500 in line with our last BTC/USD trade plan.
Technical Indicators
From above, Apr-25 with 18k against 10k volumes is our reference bar. The initial trend is bullish, but the bar is bearish with tepid bulls. Any drop below ,950 or surge past ,600 should be with high participation exceeding 18k of Apr-25 or 38k of Apr-2.
Chart courtesy of Trading View
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Crypto Community Reacts to Tether Admitting USDT Not Fully Backed
According to the company behind it, stablecoin USDT is not fully backed by fiat currency deposits. It was revealed today that the controversial crypto asset firm Tether only holds around 74 percent of the total value of USDT’s current circulating supply.
Tether and the crypto exchange Bitfinex are currently defending allegations from the New York Attorney General’s office that the latter borrowed 0 million from Tether to stay afloat after the trading venue reportedly lost 0 million. The dramatic shortcomings are thought to be the result of Crypto Capital, a Panama-based payments processor that Bitfinex used, having assets frozen in various nations around the world.
USDT Not Backed 100%, But Did Anyone Think That it Was?
An affidavit filed by Stuart Hoeger, the general counsel at both Tether and Bitfinex, has today claimed that the stablecoin crypto asset USDT is only backed by around .1 billion. This falls short of the .8 billion worth of USDT currently in circulation. The document states:
“As of the date [April 30] I am signing this affidavit, Tether has cash and cash equivalents (short term securities) on hand totaling approximately .1 billion, representing approximately 74 percent of the current outstanding tethers.”
He also details that a credit agreement between Tether and Bitfinex did indeed exist and was in place “for the protection of the virtual currency market.”
According to a memorandum by Tether’s defence lawyer, Zoe Phillip of Morgan Lewis, there is no need for each USDT token to even be backed by a dollar:
“According to the Attorney General, the line of credit needed to be frozen because it improperly impairs the reserves Tether would use for redemptions. The Attorney General appears to believe that Tether must hold in cash fiat currency for every dollar of tether. These allegations are wrong on multiple levels.”
Hoegner’s affidavit seems to support this by highlighting that the stance of the company had officially changed with regards the 100 percent backing of USDT in recent months. Given that this was widely reported at the time, it seems a wonder firstly that anyone was even continuing to use USDT when numerous other stablecoins now exist and secondly, why the news of the New York Attorney General’s allegations against the two companies should drop the price in the way it did last week.
Crypto Community Reacts to Tether and Bitfinex Legal Troubles
The CEO of social trading platform eToro, Yoni Assia, took to Twitter to opine about the revelation’s likely impact on crypto prices. He mused on the likelihood of a potential Bitcoin price pump if the news causes people exit USDT en masse. Ultimately, however, he admits that the shady goings on between Tether and Bitfinex will be negative for crypto. Although, he is sparse on specific details.
Are the news supposed to pump or dump BTC ? Its bad news, but if B USDT get exchanged to BTC it actually increases its price… what a predicament .
Tether Lawyer Admits Stablecoin Now 74% Backed by Cash and Equivalents https://t.co/f9Rw75FNCO via @CoinDesk— Yoni Assia (@yoniassia) April 30, 2019
Meanwhile, independent crypto researcher and analyst Hasu seemed to hint that the debacle would inevitably invite greater regulatory scrutiny to exchanges, which could in turn damage the utility of Bitcoin and other crypto assets:
I'm not surprised that bitcoiners have a soft spot for Tether/BFX.
Lightly-regulated fiat on/off ramps are part of bitcoin's extended security model. Bitcoin is less useful when every way in and out is US-regulated. They accept that this increases the risk of getting cheated. https://t.co/kPdNK9N0A1
— Hasu (@hasufl) April 30, 2019
Cardano (ADA) founder and Ethereum (ETH) co-founder Charles Hoskinson used the news to draw attention to the fact that banks routinely operate on far lower reserves than those admitted by Tether today. This sentiment was also echoed by RT’s Max Keiser and many others.
Well at least tether has more backing than my bank account https://t.co/Tm6ZgBiXZF
— Charles Hoskinson (@IOHK_Charles) April 30, 2019
Tether is 74% backed.
Fed is 1% backed.
JP Morgan is -20% (un)backed.
— Max Keiser, tweet poet. (@maxkeiser) April 30, 2019
Ultimately, such a comparison is largely redundant, however, as any form of fractional reserve backing USDT the anti-thesis of what many people in crypto signed up for when they got involved with the industry. Larry Cermak, an analyst with The Block, stated that comparisons between the percentage reserves held by Tether and those of the average bank ultimately ignore the shady goings on of the crypto exchange Bitfinex. He went as far as to state that both companies are guilty of pathological lies:
So all of the sudden it’s fine that Tether only has 74% of cash on hand because banks are even worse? And it’s fine that Tether as well as Bitfinex pathologically lie about anything they can get away with? pic.twitter.com/y8jVU21HSw
— Larry Cermak (@lawmaster) April 30, 2019
The Tether/Bitfinex saga is far from over yet. NewsBTC will continue to bring you coverage of the legal hearings as they develop.
Related Reading: Technical Indicator Suggests Tether Trouble Has Put an End to Bitcoin Rally
Featured Image from Shutterstock.
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Tether (USDT), A Blip and Another Opportunity For Bitcoin (BTC) Bulls
- Bitcoin (BTC) shed billion after NY OAG sue iFinex
- Tether controversy force Bitcoin liquidation
The OAG of New York is after iFinex, and from their documents, officials say the Hong-Kong based exchange, BitFinex are contravening NY Laws and therefore suing them. With additional evidence that the exchange “raided” Tether’s coffers and probably affecting the peg, clients are worried. Even so, Bitcoin (BTC) is stable, reversing earlier losses.
Bitcoin Price Analysis
Fundamentals
There is sell pressure, and if we check the reaction of the crypto and the Bitcoin market, then it’s likely that bulls are firmly in control despite yesterday’s mini-crash. The source? Well, it has to be all the controversies surrounding iFinex, the parent company of BitFinex, the Hong-Kong based cryptocurrency exchange, and Tether Limited, the issuer of Tether (USDT) stable coin. If historical event serves us well, then we can conclude that news touching on the stable coin’s reserves or peg does harm Bitcoin.
In response, partly due to its direct correlation with altcoins, the market often sinks. After yesterday’s revelation by the New York’s Attorney General Office, the markets capitulated with Bitcoin sinking to ,200 before recovering during the Asian session.
An analysis of documents from the Attorney General office reveal that iFinex and BitFinex did violate New York state laws due to their “issuance, distribution, exchange, advertisement, negotiation, purchase, investment advice, or sale of securities” contrary to laid out rules.
However, they went further writing that the office would uncover possible fraud between BitFinex and Tether Limited. While there is a statement from BitFinex on the matter, the protracted legal battle between the stringent and accountability demanding OAG and iFinex is forcing users to exit the exchange.
Candlestick Arrangement
Price wise and Bitcoin (BTC) is down 4.2 percent. However, there is a double bar bull reversal pattern as prices bounce off the middle BB meaning buyers are back in contention. Although bears of Apr-11 were temporarily confirmed, the fact that prices are firm above ,000 and trading above a critical resistance trend line visible in the weekly chart, hints of underlying bull momentum.
Besides, even if there is a double bar bear reversal pattern because of USDT related controversies, prices often bounce back faster, and the initial trend usually resumes. In our case, buyers are in control, and with a clear uptrend, Bitcoin will likely expand above the double bar bull reversal pattern of Apr-23-24 in a trend resumption phase towards ,000.
As such, risk-off traders should load up on dips in smaller time frames with stops at Apr-25 lows of ,050 with targets as aforementioned.
Technical Indicators
Our anchor bar is Apr-25—21k against 11k–and for trend continuation, any bull bar above Apr-24 highs must be with high volumes above 21k or preferably 54k of Apr-2 confirming buyers evident after the week ending Apr-6.
Chart courtesy of Trading View
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Stablecoin USDT Launched on Tron Blockchain
n Tether is now issuing its stablecoin USDT on the Tron blockchainn
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Crypto Exchange Poloniex Adds Support for USDT on Tron Blockchain
n American crypto exchange Poloniex supports Tethers stablecoin USDT on the Tron networkn
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Major Crypto Exchanges Huobi Global and OKEx Launch Support for Tron-Based USDT
n Two major crypto exchanges Huobi Global and OKEx have announced their support of the Tron-based version of stablecoin USDTn
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Tether Updates Website, Says USDT Backed by Reserves, Not Just Cash
n nn nn Tether just updated its website to clarify that each of its USDT tokens, which it used to claim were always backed 1-to-1 with traditional currency, are backed by assets other than fiat currency.Now, the website instead reassures its patrons that its always 100 backed by its reserves. It clarifies this vague language, even legalistic language, by saying these reserves include traditional currency and cash equivalents and, from time to time, may include oth
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Bitcoin (BTC) Set For $4,500 With Tether (USDT) Reserve Doubts
- Bitcoin prices stable and bullish
- Suspicion around Tether reserves will likely benefit Bitcoin
- Participation levels low but could increase as demand picks up
Tether is making headlines thanks to their latest update touching on their reserves. While Bitcoin prices are unresponsive, it is likely that BTC will react as investors get edgy liquidating their USDT.
Bitcoin Price Analysis
Fundamentals
By rolling a service with the express purpose of sheltering crypto traders during times of uncertainty, investors as well as traders expect better from Tether. On many occasions, the state of its liquidity has been questioned because it states that it is a stable coin pegged to fiat. However, what is worrisome is the latest beguiling update where the firm, while acting as a crypto haven, appears to be diversifying its reserves and acting like a trusted third party or a bank.
In reality, the stable coin operates in a fragile ecosystem and drawing its value as an IOU or a debt. The assurance is just because every USDT holder can redeem each currency for a dollar or Euro. Questions are now directed at Tether’s ability as an issuing firm to redeem every coin in circulation for fiat. The situation has been made worse given the firm’s association with banks with dubious and patch track records, the lack of bank audit and their association with BitFinex subpoenaed by the DoJ that they USDT to fraudulently drive crypto asset up during the last bull leg of late 2017.
Candlestick Arrangements
Whenever there are concerns about Tether’s operation and hard questions asked about USDT pegging, Bitcoin tends to benefit. Back in Oct 15 2018, prices spiked when it emerged that Tether had bank related troubles.
At the time of press, Bitcoin (BTC) is dangling and ready to slide. It is immune to buyer’s stimulation, and even with optimism around the future, liquidation is on. We are yet to record sharp drops that reflect losses of Feb 24 neither have seen spikes confirming bulls of Feb 18 and Mar 5.
However, what is visible is a consolidation inside Mar 5 high low as prices trend above ,500. From an effort versus results point of view, buyers have the upper hand.
Even with this calmness, every dip is a buying opportunity for risk-off traders aiming at ,500. On the other hand, liquidation below ,500 cancels this projection as bears aim at ,000 and ,800.
Technical Indicators
Our analysis anchors on Mar 5 double bar bull reversal pattern. Complete with average volumes—7.6k– but holding recent high lows, any sharp gain or loss driving prices above ,000 or ,700 with high trade volumes above 10k of Mar 5 or 36k of Feb 24 confirms gains of Feb 18 or sell off of mid-Nov 2018.
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