In what appears to be a major shift in strategy, the tech firm Tether recently purchased 1,529 Bitcoin in the second quarter according to recent confirmation by its Chief Technology Officer, Paolo Ardoino. This exclusive news has the crypto community at large discussing the implications of this major transaction.
1. Tether Purchases 1,529 Bitcoin in Q2
As disclosed by crypto market intelligence firm, Cryptoquant, Tether announced it has purchased a total of 1,529 Bitcoin during Q2 2020. This suggests that the stablecoin operating company is continuing its significant BTC buying spree that also saw a notable purchase in the previous quarter.
This purchase followed their acquisition of over 6 million USDT in April of this year. This large injection of liquidity into the BTC market is a likely contributor to the continued growth in price for the digital asset.
Tether is known as a USD Stablecoin that is often used as a hedge against extreme volatility in the crypto markets and is commonly utilized as a substitute for the US Dollar on crypto exchanges. Currently, it is highly prevalent due to its expediency, reliability and widespread accessibility.
2. Tether CTO Admits to Bitcoin Purchase
According to a recent report, Tether’s Chief Technology Officer, Paolo Ardoino, has admitted to purchasing Bitcoin on December 8th. In an exchange with the public relations team of Tether, he confirmed the purchase was made using Tether treasury funds and was subsequently added to the company’s BTC wallet.
The news appears to be a response to recent allegations that the stablecoin company is keeping Bitcoin reserves to back its USDT issuance. Some have accused the company of manipulating the market by printing unlimited USDT tokens. Although Ardoino said on Twitter that Tether “never uses tethers to purchase crypto”, the recent purchase indicates otherwise.
It is important to note that the CTO’s tweet does not confirm that Tether holds additional Bitcoin reserves above the purchase amount. Neither Tether nor its owners have commented any further on the matter.
- Tether purchased Bitcoin using its treasury funds
- This indicates Tether may be using USDT for Bitcoin purchases
- No confirmation that Tether holds additional Bitcoin reserves
3. CoinMarketCap Exposes Transfer of Funds
CoinMarketCap, the world’s most popular cryptocurrency website, has recently revealed data that highlights the movement of funds in and out of digital currencies. The information is found to be extremely useful in analyzing and understanding the financial flow of digital currencies.
The data, gathered from exchanges, wallets, and blockchains, was presented as part of an interactive visual representation of the financial behavior of digital currencies. It showed that $2.9 billion worth of digital coins moved from wallets to exchanges between 16 August and 11 October.
The data analyzed helped to prove the growth of the cryptocurrency market, as well as outline potential challenges. It revealed that Litecoin, Bitcoin, Ethereum, EOS, and XRP were the top five digital currencies moving funds. Additionally, the analysis showed that decentralised exchange (DEX) trading had a steady increase in volume, accounting for 7.4% of total trading volume. As CoinMarketCap continues to provide informative data on digital coins, traders have been able to make more informed decisions when investing in cryptocurrency assets.
4. Impact on Crypto Markets Uncertain
Though the impact of these pandemic-induced economic issues on the cryptocurrency market remains unclear, analysis of past economic events can provide insight into what the future may hold.
High Volatile Market – Cryptocurrencies are highly volatile commodities, and past economic events have prompted increased volatility. Previous market downturns, such as the crash of 2008, have resulted in a spike of volatility in both Bitcoin and Ethereum.
Decrease in Strength – During past economic difficulties, it has been seen that the crypto markets were negatively impacted and there were significant drops in prices. This likely suggests that the prolonged worldwide recession could spell difficulty for cryptocurrencies.
The uncertain economic future of the world poses significant threats to cryptocurrencies. What is certain is that volatility is likely to increase and that there could be a decrease in the strength of crypto markets.
The news of Tether’s purchasing of 1,529 Bitcoins in Q2 comes after the company faced controversies due to the lack of transparency regarding its operations. Tether’s CTO has now confirmed the news, serving as a confirmation of the company’s still-growing influence in the market. Either way, the impact of this news in the cryptocurrency space is yet to be determined.