The Ethereum/Dollar and Ethereum/Tether look odd
Something fishy is going on with all the USD pairs versus the Tether pairs. I think it’s a positive for the market because ultimately I believe exchanges are going to abandon the scam that is Tether – they’re already stepping up to do it with multiple listing of the newer (and real) stablecoins.
One of these charts is not like other
Let’s check out these two charts. the Coinbase US Dollar pair and then the Binance Tether pair for Ethereum
There is a very noticeable and extended divergence in the price action between the US Dollar pair of Ethereum and the Tether pair of Ethereum. ETHUSD shows a must more persistent uptrend with a clear higher high in the most recent price action VS the ETHUSDT pair. This phenomenon is happening across multiple crypto Tether pairs and it should point to some continued concerns with the Tether pairing. We have previously seen the Tether pairs trade up to a premium of $300 for Bitcoin up to two weeks ago. There continues to be a discrepancy between Tether and the USDT pairing. When concerns over Tether’s solvency arose back on October 18th, traders quickly converted their Tether into Bitcoin, Ethereum and another cryptocurrency that they could quickly abandon to get rid of Tether.
Cryptomarket remains tight
The entire cryptocurrency market remains in a tight and congested trading range even after Monday’s drop. Volume has come into the market during Tuesday’s trade and there appears to be a growing number of retail investors/trader participating in any significant dips or pops in the price action. Cryptocurrencies remain in the beginning stages of the seasonal bull cycle. More importantly, traders continue to wait for news from the SEC regarding the final decision on the first Bitcoin ETFS. Many investors, analysts, and traders expect a massive rally on any announcement that an ETF is approved.
Stablecoins – traders remain skeptical of Tether
Tether (USDT) is a contentious ‘stablecoin’ in cryptocurrencies. Stablecoins are cryptocurrencies that represent a 1:1 conversion to a fiat currency such as the Pound or the US Dollar. Stablecoins are supposed to represent only the amount of fiat being held by the issuing coin. I.e., if there are 100 million Tether in circulation then there must be 100 million US Dollars held by Tether. However, Tether has never released audits and has been dropped by Wells Fargo and cut ties with its third-party accounting firm in early 2018. There are fears that Tether is essentially, ‘Monopoly’ money without any true fiat backing. There are many analysts and investigators who argue for and against Tether having the appropriate amount of US Dollars in reserve. Regardless, as a stablecoin Tether does not give you ownership. A great many other stablecoins such as TrueUSD (TUSD) or CircleCoin (USDC) grant you the ownership of the corresponding fiat currency. If you own 1,000 TUSD, you have a right to 1,000 US Dollars.