Cryptocurrency News Roundup | October 15 — October 21
Welcome to the PlayChip cryptocurrency news roundup, where you can keep up to date on all of the weeks important cryptocurrency and blockchain related news.
Fidelity Investments Launch Cryptocurrency Trading and Custody Platform
We reported back in June that one of the worlds largest investment firms Fidelity was exploring cryptocurrency and blockchain technology.
This week the company officially announced their crypto solution, called Fidelity Digital Assets. The new Fidelity subsidiary will offer cryptocurrency trading and enterprise grade custody services.
Fidelity Digital Assets will provide trading and custody of Bitcoin and Ethereum, the two dominant cryptocurrencies.
Tether Panic Drives Crypto Price Spike
The price of Bitcoin went on a wild ride last week. The gold standard cryptocurrency was trading on major exchanges at around USD $6,300 Monday morning.
News started to spread across social media after a doctored image began to circulate. The image appeared to be an official announcement from Binance indicating that all Tether (CRYPTO:USDT) trading would be suspended.
While the use of informal language like ‘Tether big scam’ indicated this was likely to be misinformation, many were convinced. Traders took to their exchange accounts in droves to convert their Tether to other cryptocurrencies causing the value of Tether to dip across the board.
The impact of this rush of trading activity was two-fold, as the market pressure saw prices rise for almost all currencies paired against Tether, the price of each Tether token also dropped below the $1 mark. This caused inflated dollar values for almost all major cryptocurrencies as traders struggled to dump their Tether at market rates. Tether dipped as low as USD ~92c at one point during the panic.
Adding to the impact, the reduced US Dollar value of the Tether token increased the comparative value of the paired currencies. Meaning that if the ‘real’ Bitcoin price is USD $6,800, but Tether has dipped to 92c, then a Tether/Bitcoin trade pair will show a spot price of USDT $7,344.
As the Tether tokens lost value, the usual indicators for global price averages became skewed as the Tether price was no longer aligned to the US Dollar. Many exchanges do not offer fiat trading (trading bitcoin to dollars), and so the Tether pair is used to derive the spot price for these exchanges. This created mass confusion and uncertainty and the prices reflected it with almost all major tokens surging in price before cooling off.
The real Changpeng Zhao later took to Twitter to clear the air. While vague, his assurance seemed to calm the markets nerves and the price of Tether soon began to return to it’s promised USD $1 stable value.
