Avanti Financial’s founder and CEO claims that recent information Tether provided about Stackcoins holdings may have boosted altcoin sales in the past week.
In a series of tweets on Saturday, Caitlin Long stated that the allocation of Tether Holdings Limited to Tether (USDT) reserves was not invested in “short-term, less risky and liquid securities”, but in “who knows what quality” in trust funds. Avanti CEO said traders may have felt compelled to sell other cryptocurrencies in order to reduce overall risk exposure, given that the sixth-highest stable currency with a market value of $ 58 billion could shatter other tokens amid credit adjustments. Market.
“If Tether remains a de facto credit hedge fund by investing reserves in this way, then markets can now confidently anticipate that Bitcoin and cryptocurrencies are likely to have a significant correlation with the credit markets,” Long said. “They will probably get better together.”
Long added that authorities could still decide to destroy coins in the stack after a total collapse of Tether reserves, but said the crypto industry could benefit from clarity in the legislation:
“One of the best things for the industry right now is the coordination of the currency group with US regulators, especially the Federal Reserve and the SEC. Stable currencies are very important bridges between the cryptocurrency and the US dollar.”
According to a report by Tether Holdings Limited, 75.85% of USDT support is cash and cash equivalents, with commercial paper accounting for 65.39% of this category. Long argued that a potential market downturn “would be absolutely inevitable” if Tather invested more in government accounts – only 2.94% of total cash, cash equivalents, deposits and other short-term certificates – rather than seemingly riskier assets. …
The CEO’s comments came after the price of Bitcoin (BTC) fell below $ 46,000 on some exchanges – the cryptocurrency was at $ 45,818 at the time of publication and has fallen more than 20% in the past seven days. However, it is not clear what role exposure to chatter might play in the cryptocurrency market. Binance was also in the spotlight when a Bloomberg report alleged that the US Department of Justice and the IRS were investigating a cryptocurrency exchange for alleged “illegal activity”.