Author – Mil , Asia Correspondent
On January 30, a news article from Bloomberg reports that U.S. regulators have issued subpoenas in scrutiny of one of the world’s biggest cryptocurrency exchange. The United States Commodity Futures Trading Commission (CFTC) issued subpoenas on December 6 to cryptocurrency exchange, Bitfinex and Tether, which issues one of the largest coins in terms of market capitalization pegged to the US dollar.
Tether coins (USDT) have become a popular trading substitute for US dollars on major cryptocurrency exchanges on a global scale. As of January 31, 2018, USDT’s market capitalization is at approximately $2 billion. Tether claims that all of the company’s coins are backed by US dollars in reserve, but the company has not yet provided any concrete evidence of its reserves, and have not yet had its accounts properly audited. This raised red flags with skeptics, investors, and the CFTC, with many claiming that the US dollar backing is not really there.
Cryptomarket in a Sea of Red
Following this Bloomberg report, most of the cryptomarket took a nosedive in terms of market prices. The total market capitalization fell from the $580 billion level to as low as the $495 billion level. Bitcoin, the biggest cryptocurrency in terms of price and market capitalization, went down to as low as $9766—more or less 10% decrease in 24 hours. Ethereum dipped to the $1060 level after going as high as the $1230 level on January 29. Of the top 20 coins and tokens in terms of market capitalization, only Lisk recorded gains. Surprisingly, while most of the market plummeted, Lisk recorded a 27% increase in the last 24 hours.
While some investors pulled money out of cryptocurrency due to the news, some holders see this as an artificial FUD (fear, uncertainty, and doubt). Many comments from small retail investors in the cryptocommunity pointed out that the subpoenas were issued last December. According to them, this market dip is clearly a response to outdated news, which leads to speculations that some influencers are creating artificial FUDs to shakeout newbie investors and weaker hands into pulling out of the market. Thus, when enough FUD is generated, market prices would dip and would signal buying opportunities for investors waiting to pounce.
With this market dip capping the month of January, the cryptocommunity is only hoping that things would only go better in the coming months. Investors are looking forward to the many developments on the Ethereum blockchain set for rollout this 2018. Also, holders of Bitcoin believe that since BTC has already weathered many storms in its past, surviving this bleeding would only shoot its prices to the moon. For many, it’s Hold On for Dear Life (HODL).