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Cryptocurrency

Tether Troubles to Trigger Turbulence, Hitting Bitcoin and Ethereum Prices

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New controversies regarding Tether are likely to cause short-term volatility in the cryptocurrency market, affecting the prices of Bitcoin, Ethereum and others.

This is the blunt warning from Nigel Green the CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations, amid allegations made in a Bloomberg report headlined, ‘Anyone Seen Tether’s Billions?’

Tether is a stablecoin, meaning it is pegged to a currency, in this case the U.S. dollar. Stablecoins’ name highlights the idea that the peg supposedly makes them less volatile than cryptocurrencies such as Ethereum or Bitcoin, which can vary widely in value.

When a stablecoin is established, there is a reserve for the assets, which are held as collateral.

“Exactly how Tether is backed, or if it’s truly backed at all, has always been a mystery,” writes Bloomberg.

“There are now 69 billion Tethers in circulation…That means the company supposedly holds a corresponding $69 billion in real money to back the coins—an amount that would make it one of the 50 largest banks in the U.S., if it were a U.S. bank.”

Tether has hit back, writing on its website that the Bloomberg story displayed a “complete lack of diligent research and is filled with outlandish anecdotes that are not geared toward ethical reporting but character assassination.”

Mr Green says: “The accusations contained in the report include that its chief financial officer Giancarlo Devasini has used the company’s reserves to make investments and, in addition, issued crypto-backed loans worth billions of dollars.

“If true, this would directly contradict Tether’s overarching public position that the digital assets were fully backed at all times by dollars.”

He continues: “This latest controversy surrounding Tether – which has had a series of recent run-ins with the U.S. regulators – and the fact that despite this damning Bloomberg report, the company backing the cryptocurrency is still refusing to disclose where its money reserves are kept.

“This fresh row is going to temporarily dent investor confidence across the wider digital assets market, which will lead to a short-term bout of volatility.

“The turbulence triggered by the Tether troubles is likely to weigh on the prices of cryptocurrencies including Bitcoin and Ethereum, pulling back slightly the impressive upside run that they have been experiencing so far this month.”

The controversy, he says, will act as a catalyst for greater regulatory scrutiny of stablecoins and this too “will drive volatility.”

Despite predicting increasing jitters in the near term, the deVere CEO remains bullish about the major cryptocurrencies.

“Although investors will be carefully monitoring the ongoing Tether issues, I’m still confident that if the current momentum in prices continues, we could see the Bitcoin price hit new all-time highs of $100,000 this year.”

Mr Green concludes: “Tether and other stablecoins are geared towards investors who may not have the stomach for the volatility associated with Bitcoin, Ethereum and other cryptocurrencies, which can swing widely in value.

“But recent events indicate that the term ‘stablecoin’ could be misleading, because they are not necessarily as stable as many investors believe.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Cryptocurrency

Funds Flowing Into Crypto Space Hits $1.5 Billion Last Week

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bitcoin- Investors King

New money flowing into cryptocurrency space rose to a record-high of $1.47 billion last week, according to a report by CoinShares.

The huge capital inflow was after the U.S Securities and Exchange Commission approved Bitcoin ETF investing in futures and the broad-based rally that followed the announcement. Year-to-date, investors have dumped a total of $8 billion into crypto funds.

Bitcoin, the world’s most dominant cryptocurrency, rose to an all-time high of $66,974 per coin last week.

Most of the inflows go into Bitcoin-focused funds, Bitcoin focused funds accounted for 99 percent of all the $1.47 billion inflows recorded last, up from the $70 million Bitcoin exposed funds attracted in the previous week.

CoinShares attributed Bitcoin’s new attraction to the two bitcoin futures listed after SEC approval.

This is a direct result of the U.S. Securities and Exchange Commission (SEC) allowing a bitcoin ETF investing in futures and the consequent listing of two bitcoin investment products,” the report noted.

SEC had approved the first Bitcoin futures ETF, ProShares Bitcoin Strategy ETF, on October 15, 2021. It was the approval that drove Bitcoin back to $60,000 a coin before it set a new all-time record.

However, while Ether (ETH), the native cryptocurrency of the Ethereum blockchain and the world’s second-largest cryptocurrency by market value, also reached an all-time high at $4,361 a coin last week, funds exposed to Ether saw outflows for a third consecutive week. Ether outflows stood at $1.4 million last, stated the report.

This is minor profit-taking as the price closes in on all-time highs.

Altcoins like Solana (SOL) also saw inflows at $8.1 million, Cardano (ADA) and Binance coin (BNB) attracted inflows estimated at $5.3 million and $1.8 million, respectively.

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eNaira

President Buhari Says E-Naira Could Increase Nigeria’s GDP By $29 Billion

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Enaira launching in Abuja - Investors King

President Muhammadu Buhari, in a statement signed by the Presidential spokesperson, Mr. Femi Adesina and made available to the media at the unveiling of Nigeria’s Central Bank Digital Currency, the E-Naira, said that the new digital currency has the potential to increase Nigeria’s GDP by $29 billion over the next 10 years.

The President reiterated that the launch of the E-Naira makes Nigeria the first country in Africa and one of the first few countries in the world to launch a digital currency. He further said he expects the currency to enable the government to send direct payments to citizens eligible for government welfare programs as well as foster cross-border trade and assist in moving many more people and businesses from the informal sector into the formal sector, therefore, increasing the tax base of the country.

The President then congratulated the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, his deputies, and the entire team of staff who worked tirelessly to make the launch of the currency a reality.

Meanwhile, earlier in the day, the Buhari Media Organisation (BMO), the approved body for operating digital communications of the Presidency, said that Nigeria will surpass the International Monetary Fund’s (IMF) projections of 2.6 percent economic growth in 2021 and 2.7 percent growth in 2022. The Group believes under President Buhari, the non-oil sector is progressing and this can be seen in the sector’s contribution to the GDP of Nigeria.

Mr. Niyi Akinsiju, the chairman of the organization, and Mr. Cassidy Madueke said this in a statement in Abuja. The full statement given by the organization said ” This is not the first time that the IMF is making such projections, but Nigeria never ceases to disappoint it by recording higher economic growth. In 2019, IMF projected a 2.1 percent economic growth for Nigeria, but against its prediction, Nigeria recorded real growth of 2.27 percent in Gross Domestic Product (GDP).

The statement further said “In a like manner in 2021, the IMF also projected that Nigeria’s economy would fall by 5.4 percent due to the COVID-19 pandemic. It later reversed its projection to 4.3 percent, but contrary to that, Nigeria recorded 1.8 percent. 

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eNaira

eNaira: Buhari, Emefiele Launch eNaira at State House Abuja

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Enaira launching in Abuja - Investors King

President Muhammadu Buhari and the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele on Monday, October 25, 2021 officially launched eNaira, Nigeria’s Central Bank Digital Currency (CBDC) in state house Abuja.

Nigeria is now one of the few countries to have launched digital currency ahead of nations like the United States, United Kingdom, etc.

The CBN believed eNaira will help plug loopholes in the financial system, curb illicit financial flows, strengthen security, improve data collection and monitoring.

Enaira launching in Abuja - Investors King

Speaking on why he approved CBN’s decision to launch a digital currency, the president explained that his approval was “underpinned by the fact that the CBN has been a leading innovator in the form of money they produce, and in the payment services they deploy for efficient transactions.”

“They have invested heavily in creating a Payment System that is ranked in the top ten in the world and certainly the best in Africa,” the president said at the event in Abuja.

“This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.”

President Buhari further said, “estimate suggests the adoption of new CBN digital currency is estimated to increase Nigeria’s GDP by $29 billion over the next 10 years.

“We have become the first country in Africa and one of the first in the world to introduce a digital currency to our citizens.”

Africa’s largest economy has now launched two mobile applications for eNaira – eNaira speed wallet and eNaira merchant wallet – on Google playstore and Apple store to facilitate adoption and usage.

These applications tell eNaira potential users to“Get Ready With Your Accurate BVN Data For Your Hitch-Free Enrolment.

To sign-up on the eNaira speed wallet, you would be required to input the following details exactly as captured during your BVN enrollment.

First Name, Last Name, Date of Birth, State of Origin, and Email.

Your Banks are waiting to assist you in validating and updating your BVN details to ensure seamless enrolment to the eNaira Platform.

Enaira launching in Abuja - Investors King

During the launching in Abuja on Monday, Emefiele announced that N500 million worth of eNaira or $1.21 million has already been minted.

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