As fear, uncertainty, and doubt (FUD) surrounding leading stablecoin cryptocurrency Tether mounts, capital has begun to flow out of Tether and into Bitcoin and other competiting stablecoins, according to a new report.
Diar: Trading Flows from Tether to Bitcoin Due to Continued FUD
Cryptocurrency market research firm Diar has, in their latest research report, put a spotlight on the ongoing issues surrounding Tether and the implications Tether FUD has had on the overall cryptocurrency market.
Tether has been embroiled in controversy for practically its entire existence. The cryptocurrency community continually calls into question if Tether is backed by corresponding U.S. dollar as claimed. The stablecoin has also been accused of being used as a tool to prop up the market and artificially inflate cryptocurrency prices toward new all-time highs. And despite third-party audits and repeatedly refuting any allegations that arise, the cryptocurrency market refuses to give concerns around Tether a rest.
Now, according to Diar’s report, the fear and uncertainty has begun to more strongly influence the market, causing Tether holders seeking safe haven during an ongoing 10-month-long bear market to liquidate their Tether into other cryptocurrencies, primarily Bitcoin and competing stabelcoins.
Diar’s data on trading volumes tied to Tether, Bitcoin, and Ethereum pairs, show a clear trend that interest in Tether is declining while outflow into Bitcoin and other cryptocurrencies continues to grow. Both Binance and OKEx – the number one and number two cryptocurrency exchanges by trading (adjusted) volume respectively – were reviewed as part of the study.
Clarifying Confusion over Tether-Fueled Price Premiums
The report also clarifies confusion surrounding the continued price premium Bitcoin enjoys depending on which exchange you look.
For example, popular margin-trading exchange Bitfinex currently shows a price of $6,581 for Bitcoin, meanwhile, Coinbase Pro, among the most popular U.S.-based exchanges, is trading at $6,423 – representing an over $150 discrepancy. After an initial exodus from Tether, the price premium reached over $1,000.
Diar says that the “risk premium” created by the Tether controversy is actually due to the
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