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Bitcoin Raises 10 Percent
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Bitcoin Raises 10 Percent in Value After Credit Scare

Bitcoin sharply increased in value Monday raising by as much as 10 percent on the leading cryptocurrency exchange markets. This increase appears to be spurred by a credit scare on one of the major cryptocurrency exchanges which spurred a rush to purchase the digital currency.

The rise in value began as a signal to sell off the USDT, a digital coin which has been directly tethered to the U.S. dollar. This coin began trading at one dollar but dropped to 88 cents following the selloff.

Bitcoin Raises 10 Percent and Why…

According to the co-founder of CryptoCompare, Charles Haytare, and this seemed to have spurred people to look at bitcoin as a much better option for purchase. “People were willing to pay more to get hold of bitcoin and get off USDT as worries circulated about credit risk.”

This is not a surprise, however. According to Forbes, those investing in Tether frequently moved to other cryptocurrencies, which has the effect of raising the price of bitcoin while driving down the price of the Tether.

Tether is the second most commonly traded digital currency, following only bitcoin, according to CoinMarketCap. This digital coin was designed to provide stability and has established itself as a stable currency based upon the fact that it does not deviate much from the price of the U.S. Dollar. In fact, according to the company, Tether Limited, each coin is actually backed by a USD. This has never been verified, however.

According to MarketWatch, the question of whether Tether actually has enough dollars in reserve to back its coin has been questioned. This is considered one of the primary reasons why USDT faces fluctuations in currency, as analysts and traders are skeptical of the company’s claims.

The Value Is Rising

According to CoinDesk, Bitcoin increased in price from $6222 earlier in the day to a value of $6732, adding as much as $10 billion to the value of the digital currency. On the Hong Kong taste exchange Bitfinex, Bitcoin was trading at a price that exceeded $7000 as late as last week.

This led to a temporary suspension of fiat deposits by the exchange on Monday in what the company referred to as a “processing complication.” In a statement, Bitfinex added:

“We are working to implement a new and increasingly robust fiat deposit system to be available in the next 24 hours, by Tuesday, October 16, 2018, to allow for the efficient processing of fiat deposits. Until then, we apologize for the inconvenience of the situation.”

In a story published on Medium last week, the company specifically address the allegations that they had become insolvent, explaining that the company was operating as business as usual. “Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this.”

Bitcoin is the company that is greatly benefiting from the current volatility of the market. They have seen their price this week a race all of the losses the company suffered last week leaving the price stable with their mid-September value.

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