Meanwhile, Tom Lee of Fundstrat says the lack of significant downtrend in the BTC price action since the Bitfinex news broke out is further proof of BTC’s maturity as an asset.
Bitfinex Bitcoin Price at $300 Premium
The price of Bitcoin on the Bitifinex exchange platform is currently $300 higher than the average BTC price. Reports indicate that this premium exists due to traders exiting their tether (USDT) positions in favor of bitcoin.
Commenting on the matter, Mike McGlone, a Bloomberg Intelligence analyst opined:
“What the actual price is and what’s being used to translate to Bitcoin is part of the issue. People on Bitfinex are getting out of Tether, off the exchange and what’s the first thing you’re going to buy if you don’t want too much broad crypto exposure? Bitcoin.”
This panic USDT exiting comes following reports that Bitfinex and Tether covered up losses of about $850 million. As previously reported by BTCManager, the New York Attorney General accused both Bitfinex and Tether of mishandling client funds.
Tether Isn’t 1:1 With USD
The fallout from the revelation by the New York AG forced Tether into admitting that the stable currency wasn’t completely backed by USD deposits. Tether lawyers on April 30, 201 declared that the USDT stablecoin is only backed 74 percent by cash holdings and other equivalents.
This revelation is completely at odds with the company’s previously consistent assertion of being fully backed by cash deposits and other securities. In an interview with Bloomberg, Dave Balter of Boston-based Flipside Crypto Inc. said:
“Everyone’s wondering if this is going to exist, if the exchange is going to exist, and are they going to be able to offset the costs of some legal issues.”
Tom Lee: Proof that Bitcoin Winter Is over
In the aftermath of the $850 million loss, the price of Bitcoin did slide down by about seven percent, losing more than $400 in the process. However, BTC appears to be in recovery mode and has now recovered close to 50 percent of the slump.
For Tom Lee of Fundstrat, the fact that the news didn’t cause a catastrophic meltdown in the BTC price action is further proof that the bear market is over. The top-ranked cryptocurrency is currently up by about 2.5 percent in the last 24 hours.