Several firms like bitcoin, whether cryptocurrency or not, have their own bubbles. These bubbles are inevitable and are always there, no matter what. This could simply be said for a company like GameStop. But it is never the same with Bitcoin. A stablecoin, about 2 years ago, called Tether, was accused of manipulating the oldest cryptocurrency in the world. The tokens of the company are called “tethers.” Since it is a stablecoin, it always has at least $1 for every token to be backed by.
A paper by Texas University said that these tokens were not backed by any dollar but rather were hiked in prices by the firm buying Bitcoins. The firm obviously said that this claim was wrong. Back then, Tether’s summed up values was about $2.7 billion. This directly means that it must have been backed by $2.7 billion real dollars. An attorney from the State Of New York called Letitia James began an investigation into Tether and Bitfines’s exchange, iFinex. She applied Martin Act to the firm and went on to say it may have defrauded investors of New York. There was also a reference to Bitcoin.
Is Bitcoin In A Bubble?
Bitcoin bubbles have been called out for several years since its inception. Even the Securities Investment Strategist of BOA, Michael Harnett, once called it the mother of every bubble. It has also been said that every time a bubble of BTC bursts, a newer one is already blowing in place. What people do not understand is that a cryptocurrency bubble is when a token is traded in a specific price range exceeding the current value of the asset’s (token’s) value.
Tether has been sliding upwards and spiraling downwards along with Bitcoin’s ride. Tether finally stated about 2 years ago that their stablecoins are only backed by about 74% of actual values, which directly means there is no direct value to it. It is also claimed a bit of “fishy money” was taken from Tether to cover losses for its sister BitFinex.
