Bitcoin’s Black Swan: What Happens If The CFTC Targets Tether Next?

Tony "The Bull" Severino

4 years ago

3 mins read

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The unthinkable just happened: Bitcoin derivatives trading platform BitMEX is being targeted by the CFTC for a variety of charges, and the company’s CTO has already been arrested related to the case. Now, the worst possible scenario could be on the horizon: The United States regulator could target Tether and parent company Bitfinex next.

Here’s how this black swan event could play out, and how it could be devastating to the entire fabric of the cryptocurrency if this happens.

Crypto Industry Giants Feel The Pressure Following CFTC Taking On BitMEX

The cryptocurrency market is currently experiencing a moment of uncertainty that surprisingly Bitcoin has held up well from. The most dominant derivatives trading platform over the last several years, BitMEX, was just slapped by the CFTC and US Department of Justice with a slew of charges.

Bitcoin price fell as a result of the negative news but has been keeping its head above $10,500 so far. Regardless of how the crypto asset’s price is holding up, sentiment isn’t doing as well.

Cryptocurrency valuations are driven by speculation primarily, and after the news broke, market participants took to Twitter to do what they love to do the most: speculate.

A wide variety of conclusions have been drawn, such as “institutional racism,” “Bitcoin is dead,” and a number of other pessimistic outcomes. But there’s one scenario that could be especially bad for the entire cryptocurrency market.

BTCUSD Weekly What Happens If The Growing Tether Supply Takes Down Bitcoin? | Source: TradingView

Could Tether and Bitfinex Trigger A Black Swan In Bitcoin?

The two United States entities targeting BitMEX, also have had their sights set on Tether and by relation, Bitfinex. The two businesses share a parent company and several other ties.

While the token itself is a stablecoin tied one to one with the dollar, its existence has been anything but stable.

Fears of Tether being insolvent in part drove Bitcoin down to its bear market bottom of $3,200. Tether, which trades under the USDT ticker, was also central to a CFTC investigation involving Bitcoin price manipulation.

Back then, however, Tether’s market cap was just $2 billion. Today, it’s over $15 billion, and therefore significantly more integral to the overall cryptocurrency landscape.

USDT is also now the base trading pair on several top cryptocurrency exchanges. A total collapse of Tether could result in a total collapse in the greater crypto market, and Bitcoin especially.

The more Tether is printed, the more analysts expect Bitcoin price to rise. But what if all that Tether is suddenly at risk of being worthless, or if the parent company is targeted further by the CFTC and the DoJ, much like BitMEX just did?

Featured image from Deposit Photos, Charts from TradingView

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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