Bitcoin [BTC] recently led a significant bull run which pumped up the price by 15% in valuation. After the hike, the price of USDT was over 7 yuan on over-the-counter platforms, which meant crypto traders based out of China had to pay an additional 3 percent to 5 percent for Tether [USDT] to avoid a ban on crypto trading.
Zhao Dong, Chinese Bitcoin Billionaire, and an early Bitcoin adopter was outraged with the USDT premium and took it up to Weibo [Chinese equivalent of Twitter] to explain that the premium charge was due to USD capital flow, instead of the assumption that Tether was inflating USDT to hike the price.
Zong explained that the biggest exchange that currently existed in the US was Coinbase, which largely traded in dollars. The exchanges in the states which had significant trading volume would use USDT trading since BTC and USDT were able to flow freely between exchanges without any price discrepancy. Hence, the premium in USDT occured only when the Coinbase BTC-USD pair became hyperactive over a short period.
Zong further added that in a situation where the market surges, investors rush to Coinbase because the exchange saves the step of USD to USDT conversion. Since there is a lot of dollars to acquire, Coinbase goes up first and USDT goes up later.
In a short-term like that, the BTC/USD pair surpasses the BTC/USDT, which points towards a scenario where BTC would be worth more in USD than in USDT temporarily; which inflates the premium on USDT.
The increased premium on USDT would be reduced as soon as investors without direct fiat to Bitcoin channel would fomo into Bitcoin with newly converted USDT. In such a situation, BTC/USD would drop and BTC/USDT would improve and cause a “negative premium” in USDT for a temporary period; such as the current situation after the bull run.
Even though Zhao put forward an argument for investors to believe that US dollar inflow was the reason behind the price surge of USDT, many investors did not buy it as USDT was mostly played by Chinese traders.
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Bitcoin [BTC]: 60 Minutes segment airs on CBS; market relieved over no FUD content
Bitcoin [BTC], the largest cryptocurrency in the world has gained a lot of mainstream media attention over the years. However, most media houses have often failed to deliver the message to the masses, with the main reason being lack of research and knowledge of the subject. The cryptocurrency was thrown back into the spotlight after CBS released a teaser to their latest “60 Minutes” episode, unveiling a few influencers of the industry, speaking about their experience.
The episode, which released on 19 May 2019, immediately grabbed the attention of the cryptocurrency space, with a majority wondering whether the media channel would nail it or fail it. Interestingly, there was a poll conducted on Bitcoin Talk, where the question was ‘CBS 60 Minutes 5/19/19 on Bitcoin. Will it cause FOMO or FUD?’
60 Minutes, broadcast on the CBS Network is one of the oldest and most-watched American television programs, with the focus being “the real story on America’s most prevalent issues”. According to CBS, 60 Minutes has an average of 11.4 million viewers and about a million people who listen to its radio broadcast and podcast.
The show titled ‘Bitcoin’s Wild Ride’ aired hours ago, and covered the story of Charlie Shrem, the founder of BitInstant, Laszlo Hanyecz, the famous pizza guy who is recognized as the first person to make a real-world transaction with Bitcoin, and Marco Streng, the CEO of Genesis Mining. The segment also had Neha Narula, the Director of Digital Currency Initiative at MIT Media Lab, answering questions pertaining to the coin, and Lael Brainard, a member of the US Federal Reserve, speaking about why not Bitcoin.
The show was briefly explained by a Redditor, EternitySphere,
Unlike other mainstream Bitcoin segments, this segment was well-received by the Bitcoin community after a majority agreed that it did not spread FUD and that it was an unbiased episode, contrary to expectations. However, there were few concerns pertaining to a lack of content, with some believing that it failed to explain key information; which includes how it derives it value, albeit there was no FUD.
Franky1 commented on Bitcoin Talk,
“[…] next was the whole describing mining segment involving genesis mining.(facepalm) ASIC’s do not store records(asics have no hard drive).. so saying the mining done by genesis is the location where records are kept can be misguiding people to think genesis mining are ‘the bank’ and user software just ‘watches the numbers and letters'[…]”
Rdbase also remarked on the Bitcoin forum,
“The whole segment was about charlie shrem known as bitcoin moses and his fall into bad luck with taking a payment which was used to buy illegal things on the dark web. It did have some good points but overall it was just directed towards the public view about it. As a skeptical thing to use and banks were safer with its fiat financial system”
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