Bad news for Friday, folks, if you were hoping to see the weekend with Bitcoin holding above USD 9,000.
Price has just breached that key support level hours ago and although it is right now trading at USD 9,046 at 10:25 am UTC (CoinDesk), it does seem as though the entire market is about to enter into a short term downtrend, with this respite looking only like a bounce.
Of course, everything is still possible and we may need to give it a few more hours to see what North American traders will do before we can determine the direction for November’s second weekend.
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Ethereum will be one of the more displeased altcoins, losing for the third day running now to fall back from USD 190 and staring back at USD 180. Strangely enough, it’s green days on the chart for alts like Dogecoin (1.72%), ETC (1.87%) and EOS (1.23%), so maybe it isn’t a complete capitulation from crypto just yet.
We start the day with Tether, the company behind the world’s favorite (or most used anyway) stablecoin, USDT, who has now issued strong denials against the recent research publications claiming that it was a single Bitcoin whale’s manipulation of Tether that single-handedly led to the parabolic rise of Bitcoin to its all-time high of USD 20,000 in late 2017.
The company published its official statement alongside that of its sister company, crypto exchange Bitfinex, that its stablecoin, backed supposedly by the US dollar, Tether has had no proven crimes against it. Tether denies all the contents of the research paper and accuses the authors, John M Griffin and Amin Shams, to be motivated by unethical reasons:
“To obtain publication, Griffin and Shams have released a weakened yet equally flawed version of their prior article. The revised paper is a watered-down and embarrassing walk-back of its predecessor.”
The paper in question is, in fact, not even published yet. But Bloomberg broke the news that a coming update would provide sufficient proof of the allegations against Tether, and will be peer-reviewed before publication in the Journal of Finance.
Griffin and Shams allege that an unknown holder of vast amounts of Bitcoin had used Bitfinex and Tether had been solely responsible for manufacturing the boom and subsequent crash of Bitcoin. In the original findings published on the Wall Street Journal, they even believed that the whale could possibly be Bitfinex itself. Griffin was quoted:
“If it’s not Bitfinex, it’s somebody they do business with very frequently.”
In the same article, Bitfinex general counsel Stuart Hoegner scoffed at the research which he claims “lacks academic rigor”, insisting that it was simply the “global rise of digital currency that has driven the market’s demand for tether”.
Tether’s official statement is no different from others in the past, where it outright denies any wrongdoings:
“It is reckless – and utterly false – to assert that Tether tokens are issued in order to enable illicit activity. Tether token issuances have quadrupled since December 2017. This growth is not a product of manipulation; it is a result of Tether’s efficiency, acceptance and widescale utility within the cryptocurrency ecosystem.”
Still, we’ll have to wait for ongoing litigation to settle in the coming years to find out if there is ultimately any crime perpetrated but it is noteworthy that Tether has survived years of lawsuits and accusations.
Meanwhile, FBI director Christopher Wray, in a testimony before the Senate Homeland Security Committee this week, has said that crypto is one of the security threats facing the United States. Senators had questioned Wray on several topics, including cybersecurity and crypto.
Ex-presidential Candidate and Utah Republican Senator Mitt Romney, asked if it would be more difficult for the FBI to trace crypto if they couldn’t “follow the money because the money is hidden from us and wonder whether there should not be some kind of effort taken in our nation to deal with cryptocurrency”. Wray answered by saying:
“For us, cryptocurrency is already a significant issue and we can project out pretty easily that it’s going to become a bigger and bigger one. Whether or not that is the subject of some kind of regulation as the response is harder for me to speak to.”
He did warn also that if the US didn’t keep up in terms of technology, it would soon find itself “walled off” even if today, they already had the means to track crypto transactions.
Not that any of this is news since the US state has been keeping an eye on crypto for as long as headlines have been mainstream.
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