Bitcoin price up while Tether (USDT) Drops Amidst Dollar Peg Doubts

Tether credentials as a reliable dollar substitute in the cryptocurrency marketplace, is in jeopardy. For the longest time, the altcoin has billed itself as a Stablecoin, pegged on the dollar.  However, traders are increasingly questioning its Stablecoin credentials in the wake of price differentiation.

For instance, the altcoin recently traded for 95 cents against the dollar in the Kraken crypto exchange. In contrast, transactions in Binance Exchange the coin went for 96 cents. While it may seem like a small price disparity, the same continues to trigger fresh rounds of doubts on the link between Tether and the U.S dollar.

Price differentiation in various exchange has in the recent past forced some to turn their allegiance to other Altcoins. Traders shifting from Tether to other Altcoins such as Gemini Dollar (GUSD) appears to have triggered a rally in the sector. For instance, Bitcoin rallied in an unusual stretch after remaining subdued over the past one month.

Bitcoin (BTC) was up by more than 10% in response to the developing Tether-Dollar woes. Ether (ETH), on the other hand, jumped 8% with Ripple (XRP) also rallying by 12%, the fact that Tether accounts for nearly 20% of the total cryptocurrency volume, explains the recent price action activity.  As soon as traders start to move from the altcoin, such actions most of the time, trigger a ripple effect in the overall sector.

Tether continues to face a lot of uncertainty. Failure of the company behind the altcoin to provide evidence of their dollar holdings backing the coin, is one of the nagging issues. While the firm has insisted that all coins are redeemable, at $1 that appears not to be the case.

The altcoin has also come under pressure in the market on persistent concerns about its relationship with Bitfinex exchange. The exchange is the subject of insolvency concerns something that most people attribute to a recent transfer of USDT coins from the exchange.

Tether prominence in the burgeoning sector has to do with its relationship with the dollar. In addition, it is easy to transfer the coin between exchanges as well as other online platforms. Its stable price relative to the dollar is another aspect that his seen it elicit strong interest from crypto enthusiasts.