Many people happy about recent price pump of Bitcoin. Price increase is good, especially in this gloomy mood market enviroment.
But.... what is the real reason of this pump ?
Let's remember what happen in Tether.
1- Bitfinex is sending 850 million USD to Panama-based Crypto Capital with no contracts.
2- Crypto Capital later said that the fund could not be reached, the fund may be seized by Poland, Portugal, USA.
3- Bitfinex is asking Tether for money to cover the deficit of 850 million usd.
4- Like the central banks, 700 million usd tether is printed by Tether and 6.5% interest (legal rate) is lending to Bitfinex.
5- The amount of tether printed is 25% of the total tether volume.
6- If Bitfinex pays this debt, it's okay. If not, Tether will have the money to cover only 75% of the total supply.
7- If the money is not paid or cannot be paid, Tether's price will automatically be 0.75 usd, not 1 usd.
8- After the events of that time, it filed a lawsuit against tether / bitfinex.
9- This case was accepted by the judge two to three months later and the trial is still ongoing.
10- The money is frozen by the Polish, Portuguese and US governments.
11- This means that the final outcome of the trial will be a penalty.
12- To cover this deficit, some people need to boost Bitcoin price to sell it at higher price ( %25 increase ? )
13 - Expecting more increase to replace above mentioned losses. Sharp fall is possible when they sell at "increased" price.
stay tuned.
https://www.publish0x.com/snowundersun/risk-tether-and-recent-pump-bitcoin-xnkdeq