Jackson Zeng No Comments

Bitcoin Price: $5285 (01 May 19 11:53pm)

 

Dear valued clients,

A lot has transpired this past week, it is important that you take the appropriate steps to ensure your portfolio reflects your risk appetite.

I will go over the important points below before getting into the market commentary.

 

Key Points:

  • New York Attorney General’s office has alleged that Bitfinex lost $850 million and subsequently used funds from Tether to secretly cover the shortfall.
  • Bitfinex issue a statement claiming the “lost” funds have been seized in various jurisdictions.
  • Tether lawyers confirm the USDT stablecoin is only about 74% backed by fiat equivalents as of April 30.
  • Overall bullish ‘Golden Cross’ emerged in the market but the risk in Tether(USDT) hasn’t affected the price.

The Key Points Affecting the Market at Current

 

Above is a snapshot of the stablecoin market on April 19. Among the Top 6 live stablecoins, Tether makes up an enormous 74% of the market cap, and captures a market share of the trading volume of 98%. An amount almost not worth comparing to the rest.

This means the potential collapse of Tether could cause an immense reduction in liquidity for Bitcoin and quite likely amplify the volatility potentially by orders of magnitude.

Top 6 Stablecoins Market Cap (USD)  MC % 24 Hour Volume 24H Vol % Pairings
Tether $2 B 74% $8 B 98% 400+
USD Coin $242 M 9% $45 M 1% 114
TrueUSD $203 M 7% $37 M 0% 150
Paxos Standard $118 M 4% $62 M 1% 74
DAI $95 M 3% $41 M 0% 77
Gemini Dollar $66 M 2% $3 M 0% 60

What should you do?

If you are currently holding USDT, I would urge you to immediately stop doing so and choose an alternative. There are a number of other Stablecoins on the market supported by a variety of major exchanges detailed above.

Alternatively, you may trade through an OTC desk or a Brokerage like Caleb & Brown, that conducts the transactions through fiat bank wires. While a 74% backed Tether will not collapse immediately, keeping funds in USDT is equivalent to paying $1 for $0.74. While the market price of USDT is roughly $0.99 at current, you don’t want to be the last one out the door.

Similarly, a loss of $850 million has placed a tremendous financial stress on Bitfinex so if you currently have assets held on Bitfinex, please get your cold-storage wallets set up and take your assets off the exchange.

If you need any assistance relating to this matter, please contact your broker to see if we can assist.
 

Jackson Zeng

Jackson has over five years experience in Cryptocurrency Trading and founded one of the first managed Cryptocurrency Investment Trusts in Australia, Bit By Bit Capital. Jackson currently acts as COO for Caleb and Brown, CIO for Bit By Bit Capital and has featured frequently on Sky News, The Herald Sun, The Australian and other major News outlets as a leading expert on cryptocurrency analysis.

Whether you are new to the market, or a seasoned trader, Caleb & Brown can help to realise your goals. Call us on +61 1800 849 149  or Contact Us to discuss further.

connect with us

 

The information herein is not intended as legal, financial or investment advice and should not be construed or relied on as such. No material contained herein should be construed or relied upon as providing recommendations in relation to any legal or financial product. This email contains confidential information intended only for the person named above and may be subject to legal privilege. If you are not the intended recipient, any disclosure, copying or use of this information is prohibited and you must destroy the original transmission and its contents. Caleb and Brown provides no guarantee that this communication is free of virus or that it has not been intercepted or interfered with. If you have received this email in error or have any other concerns regarding its transmission, please notify support@calebandbrown.com. Any views expressed within this communication are those of the individual sender. This communication should not be copied or disseminated without permission.s The information you provide will not be given to any third parties. If you need to request changes to any information you have provided, please contact us. The information will not be given to third parties unless we are compelled by law. Any personal information in this document must be handled in accordance with the Privacy Act 1988 (Cth).