By CCN.com: Wall Street bitcoin traders clearly DGAF about the Tether/Bitfinex scandal. As crypto investment firm HASH CIB noted on Twitter, institutional traders were more bullish than ever last week, with no short positions taken on bitcoin in CME’s BTC futures market.
Wall Street Drops its Bitcoin Shorts
As massive a scandal as Tether and Bitfinex are mixed up in, even the $850 million in losses compounded with alleged fraud are a drop in the bucket compared to the $1 trillion wiped from the stock market Monday due to the ongoing U.S. China trade war.
Despite – or likely because of – the devastating losses to an equities market highly exposed to political malfeasance, bitcoin’s price continued to surge.
Adding to the bullish narrative, institutional demand for crypto appears to be rising. At the end of last month, Grayscale Bitcoin Investment Trust inflows stood at an all-time high. GBTC’s movements are a reliable indicator of institutional sentiment toward bitcoin.
Seeing Wall Street load up on bitcoin with all the usual suspects bodes very well for the crypto market. Seeing little institutional appetite for bitcoin shorts does too.
Tether’s All Tangled Up in Bitfinex Scandal
What makes this rising institutional demand even more notable is that it comes at a time when Bitfinex – one of the oldest cryptocurrency exchanges – has become embroiled in a major scandal, and Tether’s all tangled up in it as well.
New York Attorney General Letitia James is investigating Bitfinex for allegedly dipping into the reserves of controversial stablecoin Tether to cover up a loss of $850 million that had been compromised by Panamanian payment processor Crypto Capital Corp.
A lawyer for Tether Limited admitted on April 30th that each Tether coin is currently backed by only $0.74 in cash, coupled with short-term securities. That was a bombshell revelation that confirmed serious fears about Bitfinex and Tether.
But global crypto markets were unaffected. They actually had a big yawn to give to the Tether scandal. It barely registered as a blip in bitcoin’s price near the end of April, and we all know what happened next.
Last modified: March 4, 2021 2:31 PM