Cryptocurrency Exchange

Margin Trading for Stablecoin Tether launched by Bitfinex

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As per a blog post published on December 21, 2018, Bitfinex has launched margin trading for one of the stablecoin, Tether (USDT). Bitfinex is a Hong Kong-based cryptocurrency exchange firm.
The post further added that the USDT would be available as collateral for margin positions along with a dedicated lending market. Bitfinex has currently launched margin trading for the USDT/USD pair, which would supposedly lead to more efficient price discovery and enable users to hedge the exposure taken on stablecoins.

Though currently, the exchange has come up with stablecoin margin trading only for the USDT/USD pair, it is also planning to launch the margin trading for some other stablecoin pairings also once sufficient liquidity is reached.

Earlier during this month, Bitfinex along with its by-product Ethfinex had introduced extending support for the four new major USD backed stablecoins, including USDC, True USD (TUSD), Paxos (PAX) and the Gemini dollar (GUSD). The above mentioned four new entrants joined DAI and the industry stalwart, USDT which were already being supported by Ethereum-backed coin, all of which are to be traded against the U.S. dollar.

Bitfinex was in the news in the latter part of last month (November) when a probe was initiated against Bitfinex by the United States Department of Justice (DoJ) in connection with suspected cryptocurrency market manipulation. The probe by the agency was primarily focused on whether or not USDT was utilized to artificially blow up the Bitcoin (BTC) prices during last year’s remarkable rise.

The DoJ was watching on how Tether issues new tokens and investigating the reasons behind why the majority of USDT is entering the market through Bitfinex. This probe was part of the larger inquiry which was being conducted on whether “market tricks” were used to partially inflated crypto prices in recent years.

Back in December 2017, both Bitfinex and Tether had received a summons from the U.S. regulators for reasons undisclosed, which allegedly relates to firm doubt over Tether’s claims that USDT is backed one-to-one by the U.S. dollar.

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