Bitfinex, the popular crypto exchange is offering Bitcoin with a two percent premium. The Bitcoin premium increased during the last week, according to an investigation carried out by BitMEX Research. This situation emerged when the stablecoin Tether (USDT) saw a decline of a few cents from its $1 pegging.
Alex Kruger, the prominent crypto analyst and trader, stated that this decline in the price of USDT is due to three factors. The first is when traders began moving to regulated and audited alternatives such as Pax and Gemini USD. The second is when traders began selling USDT to buy cryptocurrencies. And the third is to pertain to banking services obtained by Tether LLC.
Presently, owing to the suspension of deposits into the crypto exchange Bitfinex’s HSBC banking account, all traders are requested by the exchange to sell or purchase major cryptocurrencies such as Ethereum and Bitcoin with USDT. The premium of Bitcoin on Bitfinex increased by two percent, as the price of USDT fell from $1 to $0.098 by a similar margin.
Owing to the unclear relationship between HSBC and Bitfinex and the bankruptcy of Noble Bank, it remains unclear whether the users can still redeem USDT at its base price of $1. Alex Kruger went on to explain that USDT can be redeemed at Tether for USD. However, Tether won’t destroy the redeemed USDT, it will only take them out of circulation. This could eventually pose a problem, CCN reported.
Tether has always been involved in controversies regarding the audits conducted by the company and its funds. According to reports, no improvements have been made by the company. Recently, some investigations revealed that Tether was used to manipulate Bitcoin prices.
As of now, users can take advantage of the premium crypto prices offered at the Bitfinex crypto exchange. They can sell their cryptocurrencies on the exchange for USDT. However, there is a significant amount of risk involved in this, as the price of Tether will continue to drop under $0.98 dollars, the Bitcoin Exchange Guide reported.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]