Bitcoin price CRASH ‘BLOODBATH’: Cryptocurrency could drop 80% as tether criticism rises
BITCOIN’S price could drop by as much as 80 per cent if the cryptocurrency tether is revealed to have been artificially increasing its value resulting in a “bloodbath” for investors, experts have warned.
By JOSEPH CAREY
Express.co.uk
Mon, Jan 29, 2018
Tether is owned by a trading company named Bitfinex which has recently come under scrutiny by a blogger identifying themselves as Bitfinex’d.
The user has detailed in posts, tweets and YouTube videos that tether has been plucked from thin air to boost the value of bitcoin.
Investor worries have stemmed from the fact Bitfinex has previously declared that all of its coins are backed by real US dollar deposits, giving it a one to one value.
However, market concerns have been heightened following the series of blog posts from Bitfinex’d that, if true, could send bitcoin crashing if it is discovered its value has been artificially bumped up.
To prove to investors that there is nothing to worry about, Bitfinex promised to release an audit of its financials – however this has not taken place.
Since then, Bitfinex has announced that it has cut ties with its auditor, Friedman LLP, adding to current market doubts.
In a statement, the virtual currency exchange said: “We confirm that the relationship with Friedman is dissolved.
“Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of tether, it became clear that an audit would be unattainable in a reasonable time frame.
“As tether is the first company in the space to undergo this process and pursue this level of transparency, there is no precedent set to guide the process nor any benchmark against which to measure its success.”
Nicholas Weaver, a professor from UC Berkeley’s International Computer Science Institute, declared that a “bloodbath” would ensue if tether fails to hold its value and reassure investors.
He tweeted: “At current prices, net new bitcoin requires $18million of net new dollars flowing in to maintain the price.
“Yet there is a net $100million a day of fake dollars in the form of Tethers…
“If that tether printing press ever breaks, there will be a true bloodbath on the cryptocurrency prices. Good.”
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