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Bitcoin is currently trading in the mid-$6,000 range. While it had expanded all the way to $6,800 during today’s early morning hours, it appears to have settled down a bit and taken a comfortable seat at around $6,400 during the time of writing.
Bitcoin Has Seemingly Recovered Somewhat
Bitcoin is not alone in its present ascension. The currency is joined by the likes of Ethereum, Ripple and bitcoin cash, all of which have spiked by as much as 22 percent in the last 48 hours. The crypto downfall of last week appears to be coming to an end, though there’s still plenty of catching up to do. Bitcoin was, after all, trading above $10,000 just last month.
One source says that the price spikes could be attributed to a heavy surge of Tether – a prominent, yet somewhat controversial, stable currency – flowing through the digital market. If this is true, there are positives and negatives to be faced.
The good aspect of it all is that there is money entering the space. So long as this is happening, we should continue to see price spikes happen. The markets suffer when activity dies down, so granted funds continue to make their way into the crypto space, all should be well.
At the same time, the fact that it’s Tether is likely to cause some anxiety in crypto enthusiasts. As we all remember, a report emerged from the hands of John Griffin – a financial professor at a university in Texas – in 2018, claiming that the stable currency was potentially responsible for bitcoin manipulation during the previous year.
Bitcoin reached an all-time high of nearly $20K at the end of 2017. Griffin, according to his report, says that users of Tether repeatedly purchased bitcoin with units of the stable asset every time BTC showed even the slightest inclination to drop. As Tether is allegedly tied to USD, this potentially tied BTC to the American dollar, allowing it to stabilize and even grow in a short period.
Naturally, this all backfired a year later when the bitcoin price came crashing down to about $3,500 by the time Thanksgiving rolled along.
With so much Tether flowing through the crypto space, is it safe to say that we could see these results occur again? Is the current rally something of a fluke that will stop short and cause bitcoin to crash to unprecedented lows sometime soon?
Is It Possible This Won’t Last?
On Twitter, economic analyst Jesse Colombo wrote:
We’ve had a massive asset bubble that is now crashing. Right now, most people are shell-shocked. They’re still in the denial phase… Once investors get complacent and cocky after a sharp market rebound, that sets the stage for the rug to be pulled out from under them, which will lead to an even more powerful crash.