At the time of writing, Bitcoin stands at $6,662 (+5.21%) and Ethereum stands at $212 (+5.86) as per Coin360. Bitcoin even reached a peak of around $6,971 before coming back down. The entire crypto market is seeing major greens. But what has triggered this shoot up? 10% increase in price value is a very big deal in this market. The founder of Elevated District Media, also known as ‘Nye The Crypto Guy’ on his Twitter handle, shared his thoughts regarding this boost.
Talking to BlockPublisher regarding Bitcoin hitting almost $7,000, Nye stated:
Tether FUD pumped it.
So how can this be explained to a normal person trying to understand the crypto market as a whole?
Tether is essentially a US-dollar backed cryptocurrency. The company that launched it claims that it is actually backed by real U.S. dollars that are stored somewhere. But in the past, there have been rumors that there is no actual proof that those U.S. dollars actually lie somewhere.
These rumors have again pumped up in the crypto space and traders are again questioning the credibility of Tether’s U.S. dollar peg. Although the company still claims that Tether is still redeemable at 1 dollar. Recently, rumors of the company that issues Tether, Bitfinex, going insolvent also rose up in the crypto space. These allegations were later on dismissed by the company.
Now, how does this all fit in the context of the recent crypto market bull run? As negative rumours regarding Bitfinex and Tether circulated, major shift from Tether to Bitcoin and other cryptocurrencies might have boosted this recent bull run, as suggested by Nye. FUD essentially is a short form of fear, uncertainty, and doubt, and by the looks of it, it seems Tether FUD was the thing that pumped the rest of the market up.
But what can we expect from this bull run? Is Bitcoin going to further shoot up or will it plunge down? Answering this question, Nye simply said “No idea”. This makes a lot of sense as the volatility that is associated with the world of cryptos can never be predicted by anyone. One day we see the market going up, the next day it comes crashing down. Nobody can tell for sure what will happen to the market the next moment.
Another crypto expert Thomas Power, who is a Board Member at Blockchain Industry Compliance and Regulation Association (BICRA), suggested that this boost might be seen the in hindsight of the news that a Japanese company is developing 7nm ASIC chips for the mining community. Talking about the reason for this boost he said:
New ASICs perhaps.
The new chips are expected to be revolutionary and are likely to be proven game-changing the mining arena. So as more and more developments are made with people expecting more adoption of cryptos by major companies of the world, prices usually go up. This recent bull run case might just be the same.