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Bitfinex pauses USD deposits after Bitcoin [BTC] drops: $2.3 billion at stake as insolvency rumors threaten USDT legitimacy

Anirudh VK

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Bitfinex pauses USD deposits after Bitcoin [BTC] drops: $2.3 billion at stake as insolvency rumors threaten USDT legitimacy
Source: Unsplash

Reportedly, Bitfinex, a prominent cryptocurrency exchange, has paused USD deposits to their exchange. This comes after last week’s various rumors that the exchange was insolvent, which led the management to release a statement stating that they were not.

The exchange has come under scrutiny for the wide use of USD Tether stablecoin. There have not been any transparent audits that proves that the coin is actually backed by USD. This also presents a grave situation for the market, as over $2.6 billion is in the form of USDT.

The Block, a cryptocurrency news reporting portal, revealed earlier today that the exchange has paused all of their deposits for USD. They also stated that they “expect the situation to normalize within a week”. The same portal also reported on their new partnership with HSBC Bank, after reports emerged of their previous banking partner finding difficulties to run.

Bitfinex mentioned in their blog post:

“Complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations. However, we continue to do our utmost to minimise any waiting times associated with fiat deposits and withdrawals.”

As their bank account is a private one registered under the name “Global Trading Solutions”, it was not clear whether HSBC bank knew that the exchange was banking with them. The Block stated:

“Now it appears that the private account is no longer functional. Bitfinex currently has no active method of deposits as all USD, EUR, JPY and GBP deposits are paused.”

This is in direct contrast to what Bitfinex mentioned in their post detailing why they were not insolvent. They had stated:



“Verified Bitfinex users can freely withdraw Euros, Japanese Yen, Pounds Sterling and U.S. Dollars.”

Users on Twitter also seem to be reporting the issue, with USD withdrawals currently being paused for many. Speculation also ensued that the recent drop in the price of Bitcoin was due to the rumours of the withdrawals being stopped.

The error message shown to users when they try to deposit USD states:

“USD Wire Deposits Temporarily Paused. We expect the situation to normalize within a week. We apologize for the incoveniences.”





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Anirudh VK is a full-time journalist at AMBCrypto. He has a passion for writing and interest towards the future of blockchain technology and cryptocurrencies. He does not own any cryptocurrencies currently.

Analysis

Bitcoin [BTC]: King coin’s Golden Cross confirmed; Greenspan hints at bullish market

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Bitcoin [BTC]: King coin’s Golden Cross confirmed; Greenspan hints at bullish market
Source: Pixabay

Bitcoin’s much-awaited Golden Cross, which many analysts claimed will lead to a resurgence of a bullish market, has been confirmed. The intersection of the 200-day moving average and 50-day moving average, which indicates the Golden Cross, was achieved over the past few hours.

Earlier today, the top cryptocurrency saw a massive rise after days of sideways movement. Bitcoin’s ascendance saw it break the $5,350 resistance level, which eToro’s Mati Greenspan had previously suggested will consolidate “buying pressure.”

Source: TradingView

Additionally, a major psychological level of $5,500 was also surpassed less than three weeks after Bitcoin broke the $5,000 mark.

The Golden Cross theory holds credibility among analysts in the cryptocurrency realm as it infers that the coin’s average price is above its 200-day equivalent. For the first time in over a year, the cryptocurrency market has seen its 50-day MA move above the 200-day MA, which according to many is a sign of a bullish market.

On the opposing side of the Golden Cross indicator is the Death Cross, where two indicators cross over into a bearish market i.e. the 200-day MA moves above the 50-day MA. The Death Cross manifested in April 2018, after the prices went into a free fall following the December 2017 high.

In April 2018, BTC was priced at just over $7,000, following which it lost more than 50 percent of its price by the end of the year. The price of the king coin has recovered exceedingly well in 2019 however, winning back almost 50 percent of its lost value.

Many analysts, including Greenspan, agree that the crossing of the two moving averages is a clear testament to the return of the bull market. Although he didn’t quite use those words, Greenspan tweeted,

“Ladies & Gents… The Golden Cross!
Bitcoin’s 50-day moving average (gold) crossing above her 200-day moving average (blue). 📈
This is yet another sign that we’re back in a🐂market. 🚀🌛”

However, in an exclusive interview with AMBCrypto last week, Greenspan had stated that the Golden Cross theory is a “lagging indicator,” as the Death Cross was last seen in April 2018, months after the market took a bearish turn.



In his view, the 200-day moving average is the key indicator. On April 2, Bitcoin broke this mark for the first time since March 2018, by recording a massive 17 percent daily gain and rising above $5,000.

Based on historic price changes with reference to the Golden Cross, the last time the 50-day MA soared above the 200-day MA, price of Bitcoin rose by over 8000 percent from $246 in October 2015 to almost $20,000 in December 2017. Given past market movements, the current market scenario, and the optimism in the air, the Golden Cross may just have initiated the Bitcoin bull market.





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