Tether risk premium rises to $291 as bitcoin comes back down to Earth

Things have calmed down a little after yesterday’s Tether (USDT) issuance and the abnormal price movements on Bitfinex and elsewhere with investors buying bitcoin and other top alts as an alternative.

Thankfully there are now plenty of alternatives to Tether.

Huobi to list stablecoins

Huobi for its part is taking advantage with an announcement earlier today that it will be listing four stablecoins on the exchange. The Huobi statement in part reads:

“Deposits of stablecoins Paxos Standard (PAX), TrueUSD (TUSD), USDCoin (USDC) and Gemini Dollar (GUSD) will be available on Huobi Global from October 19, 2018 (GMT+8). We’ll announce the start time and details based on market conditions at a later date.”

BitPay has also adde a stablecoin, this time Gemini Dollar (GUSD) from the Winklevoss twins exchange Gemini, based in New York.

According to the Block Bitfinex, closely aligned with Tether, has found a new banker.

The root of the problem with Tether over the past few days is thought to be related to the loss of banking services by Bitfinex. It is alleged to have acquired services from HSBC through another entity, a private company named Global Trading Solutions. However, it appears Bitfinex now has a new bank, namely the Bank of Communications based in Hong Kong.

Tether is currently trading at $0.970 but usually is priced much more tightly to the dollar peg.

Fiat back on Bitfinex

Also yesterday Bitfinex fiat deposits came back online. Customers must by KYC-verified and available currencies are USD, JPY, EUR and GBP.

The lack of such facilities will have made it near impossible for the exchange to move fiat around and that is thought to have impacted Tether operations.

Tether is meant to be backed 1:1 by the dollar but has never been officially audited to prove to the market that this is the case. Now market participants need only look to the market price to see that the peg is not wiorking very efficiently, with it briefly dropping below 0.95 two days ago.

According to The Block, Tether dollars are being held in custody by Deltec Bank of the Bahamas in the Caribbean, a leading offshore financial centre. Tether was subpoeaned by the Commodity Futures Trading Commission back in December 2017.

Tether risk premium, as at 15:00 UTC+1, 17 October 2018

Exchanges using Tether
Name Price Volume
Bitfinex $6707.40 9883
Bittrex $6715.00 328
Hitbtc $6718.75 10454
Poloniex $6718.11 239
Weighted average $6713.32
Exchanges using USD
Name Price Volume
GDAX $6423.59 10326
Bitstamp $6423.41 4084
Kraken $6423.90 2678
Weighted average $6423.60
Tether risk premium $291.13 (4.54%)

Source: untether.space

Bitcoin is trading at 6,533, having settled into a familiar trading pattern in recent hours, hovering below determined resistance at $6,600.

Coinbase has an interesting story on how bots helped savvy traders to make money on the listing of 0x on the US exchange. Altcoinnotify and Cryptohopper were both cited in the story, and we would particularly recommend the former which, being a twitter-based service, is free.

With the number of insured and regulated stablecoins numbered at at least four, Tether now has some serious competition. Having said that you may need to live in the US to get the full advantage of regulated coins like GUSD, especially where insurance is concerned.




About the Author

Gary McFarlane
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK's second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane

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