Bearish on Tether? Bitfinex Adds USDT Margin Trading

David Hundeyin @DavidHundeyin
December 23, 2018

Crypto trading platform Bitfinex has announced the opening of a margin trading service for the USDT/USD trading pair. According to the platform, the aim of the new service is to improve its stablecoin offering so as to remain consistent with market evolution and user demand. With immediate effect, traders will be able to carry out leveraged trades for the trading pair, which means that they will be able to borrow money from the platform to exchange USD and USDT.

After this activation, Bitfinex also plans to enable margin trading for more stablecoin trading pairs. According to the announcement, there are plans to include other major stablecoin pairs when enough liquidity is reached, in line with its stated commitment to providing a “coin agnostic platform”.

Following the initial announcement, Bitfinex further revealed on its official Twitter account that it led has enabled margin trading for BCH/ABC (BAB) and BCH/SV (BSV) pairs, which generated a considerable amount of interest in the replies.

Bitfinex And Tether: A Complicated Relationship

An excerpt from yesterday’s announcement reads:

Today, adding margin trading on USDT/USD pair will not only allow for more efficient price discovery, but in an important move for risk management, unlock the ability to hedge the exposure taken on stablecoins. Along with a dedicated lending market, USDT will be available as collateral for margin positions.

CCN reported earlier this month that Bitfinex recently launched new stablecoin pairs (USDT/USD and EURT/EUR) and adopted what is described as a “neutral” stance following years of sole reliance on the now-controversial USDT. With this and the enabling of margin trading for USDT, Bitfinex is hoping to position itself as a full-feature spot trading platform which equips its users with variant order types they can take advantage of.

The apparent ditching of its sole reliance on Tether has no gone without controversy however, as this came after several competing exchanges took similar moves, with many opting for Paxos Standard (PAX) in addition to USDC and DAI – all of which have now been listed by Bitfinex. Gemini Exchange, owned by Cameron and Tyler Winklevoss even made a point of launching its own USD-pegged cryptocurrency GUSD with the unspoken promise of being the “anti-Tether”, with fully audited account and regulated operations.

A recent Bloomberg investigative report into Tether raised more questions than it answered, with the revelation that the company behind the stablecoin may have had the cash reserves it claimed earlier this year, but the current status and location of the cash reserves are unknown.

Last modified (UTC): December 23, 2018 00:03

David Hundeyin @DavidHundeyin

I am a busy Nigerian writer, journalist and writer with an interest in tech and finance. When I'm not contributing to CCN and traveling around Africa, you can catch me contributing to CNN Africa, or in the writers room at 'The Other News', Nigeria's weekly answer to 'The Daily Show' with nearly 2 million viewers. My work on 'The Other News' was featured in the New Yorker Magazine, and that was then cited in the Washington Post so I'm not sure that counts as a feature but I'll definitely mention it too! I have been nominated by the US State Department to take part in the 2019 Edward R. Murrow Program for journalists under the International Visitors Leadership Program. I also like hamsters. You can reach me on Twitter at _David_Hundeyin