Bitcoin (BTC) has surged over 10% in the past 24 hours, briefly surpassing the $7,000 mark according to data from CryptoCompare. The BTC price is also fluctuating rapidly as it’s trading at $6,698 at press time.
Market analysts believe the massive Tether (USDT) selloff has sparked a "run on the bank" - and this might be the reason why the BTC price has surged so rapidly as the market’s nervousness about Tether has sparked a panic, with traders buying BTC, altcoins and other stablecoin alternatives for USDT.
As the bitcoin price surged, as usual - altcoins maintained their close price correlation with BTC, likely due to arbitrage bots - with Ethereum (ETH) up nearly 10% in the last 24 hours and currently trading at $219.00. The XRP token has also surged by approximately 10% and is trading at $0.4630.
Although it is unclear at press time what exactly caused the spike in prices, there are “scam rumors” spreading in the markets and many are now thinking, or fearing, that USDT pairs might get delisted from large cryptocurrency exchanges such as Binance.
Many cryptocurrency traders might now want to get out of USDT into BTC and other crypto assets - which could be why almost all USDT pairs have been pumping across all the exchanges. It also seems like this price pump might be short-lived.
Notably, digital asset trading platform KuCoin had suspended Tether withdrawals and deposits on October 14th but reopened them a few hours later. Redditors are now speculating whether this development was a cause of some the recent market action.
Regulated Stablecoin Alternatives
As most crypto industry participants are now aware, the market has been flooded with a raft of stablecoins. This much belief could begin to put an end to Tether’s dominance of the markets as it has so far been the most popular stablecoin among traders.
With the introduction of the Paxos Standard (PAX) - up 10% this morning - and the Gemini dollar (GUSD), crypto traders and investors now have more options as far as stablecoins are concerned. Both PAX and GUSD are also approved and regulated by the New York State Department of Financial Services (NYDFS) - whereas Tether is not.
The emergence and use of more stablecoins, apart from USDT, may also potentially be causing the wild crypto price fluctuations.