Is the Crypto-Market struggling?
Bitcoin, On Feb 5, fell below 7,000 USD, and other Cryptocurrencies are facing the downward trend.
Tether and Bitfinex
Tether is a Cryptocurrency that is pegged to fiat currencies; mainly USD. The company claims that for every tether there is the equivalent reserve of USD or other currencies like Euro. It has been a speculation that the Tether is not having the correct amount of reserves to back the 2.2 billion Tethers circulating in the market.
According to a Bloomberg report, there are links to the exchange Bitfinex and Tether. Moreover, the U.S derivatives regulator mandated the two companies to provide information on various aspects of the business. And the news is that the subpoena was sent very earlier on Dec 6, and only a few people knew it. But, nothing is official yet.
It is an estimation that one in every ten Bitcoin transactions are made by Indians.
During the budget meeting, the finance minister of India, Arun Jaitley said: “The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system.”
The media miss-represented the statement as the sign of banning Cryptocurrencies, and it blew warning whistles in the investors’ mind. But there is no complete regulatory framework available yet.
On the other hand, the confusions of the South Korean crypto-regulations are also having a negative impact on the market.
The Japanese Cryptocurrency exchange Coincheck had lost 400 million USD in NEM token theft by hackers. Japan’s Financial Service Agency has raided Coincheck’s offices and mandated the exchange to submit a report on the incident by February 13.
Even though the exchange affirmed it would partially reimburse the customers, its impact is still affecting the crypto-market.
Anyhow, when the things settle down the market will bounce back. One should keep an eye on various events like this to understand whether to sell short or to take a long position.