After months of bearish action, the Bitcoin price on Monday soared above $7,000 within a matter of hours. BTC/USD bounced from $6,269 earlier today to establish fresh highs towards $6,950, according to CoinMarketCap, adding approximately $9 billion to its market cap. On some exchanges, including Hong Kong-based BitFinex, the pair skyrocketed above $7,000.
Weak USDT Pumps Bitcoin. The circa ten percent jump was waved by the sell-off of USDT, a USD-pegged token, which didn’t exactly remain pegged to the greenback. The controversial stablecoin dropped to as low as 85 cents amidst a growing bearish sentiment against it which benefitted its quote currencies. They included Ethereum, Ripple, EOS, and other top coins – other than Bitcoin. USDT was already receiving flacks for staying below its promised peg for weeks. The coin’s issuer, Hong Kong-based Tether, and its close ally Bitfinex, an international cryptocurrency exchange, recently dropped Noble Bank as their chief banking partner after news of insolvency started surfacing. Tether, which was reportedly holding the funds that backed USDT supply in Noble Bank, couldn’t maintain the peg for the same reasons. Hence, the price fell. But, researchers argued whether Tether had funds to stabilize USDT at all. The company reportedly has been avoiding independent financial audits since launch. The crypto community is already questioning the authenticity of Tether’s early day promises in which it said that it would perform regular audits to prove a 1:1 relation between its USDT supply and USD capital.
A large USDT population, amid a mounting negative sentiment, swapped their holdings for Bitcoin, eventually pumping its value to a synthetic higher high.
