Crypto Market Blackout Showed $8 Billion Waas Wiped Out In Minutes

A new crypto market blackout is in the latest cryptocurrency news today, where the valuation of the crypto market dropped $8 billion in matter of a couple of minutes. The news had a lot to do with the office of the New York Attorney General’s office with it filing a lawsuit against iFinex and alleging that Bitfinex was mismanaging about $850 million in Tether funds. As a result, Bitcoin fell by 7.5% on the day to a new low point.

The crypto market blackout affected the entire market. Aside from the coming altcoin news which show a lot of coins bleeding, it managed to affect the Bitcoin price negatively and allow it to drop from $5,500 to $5,085 as many investors sold the money out of panic.

However, Bitcoin has managed to retrace despite the blackout and recovered to $5,200 which is its current price now, closing the day (yesterday) with only a 5% loss. As the lawsuit showed, Bitfinex’s $850 million loss had a lot to do with it, mostly because it is related to the stablecoin Tether.

On the other hand, Tether’s lack of public audits and transparency have always been a topic of critics. However, some suggested that the scandal proved that Tether did have sufficient cash reserves to back its stablecoin at an equal ratio (1:1) with the US dollar. Therefore, Tether is definitely linked to this crypto market blackout, mostly because of the fact that it is backed by the US dollar.

Bitfinex came with an official statement, claiming that “both Bitfinex and Tether are financially strong – full stop.”

We all know that Tether has been a key stablecoin for long. This crypto market blackout definitely sees it as such – mainly for its fundamental pairing abilities for most cryptocurrencies. Even though the lawsuit portrayed malpractices of the company, it showed that it is backed by US dollars.

Right now, analysts remain cautious about the results from the crypto market blackout and the short-term outlook on the crypto market in general. Some of them have suggested that purchasing Bitcoi’s dip on April 25 could be risky given that it is unclear how the case would move forward.

Based on the current reaction, the crypto market blackout did not affect the cryptocurrencies strongly. In fact, many best cryptocurrency news sites are now reporting  big signs of recovery.