Despite the uncertainty surrounding Tether and Bitfinex, which has resulted in the Tether premium spiking to over 6%, the cryptocurrency market continues to show plenty of resilience. Specifically, the 5,000 USD price level for Bitcoin remains intact and Ethereum has also managed to settle above the $150 level. Still, given the highly leveraged and speculative nature of crypto markets, the catalyst for a sell-off might be just around the corner. Late last year, at a time when Tether was exhibiting similar risk premia, the catalyst for another leg lower was the contentious Bitcoin Cash hard fork.
The first-ever “hash war” saw Bitcoin SV (BSV) carve out a market share before the two chains subsequently called a truce. As a guide, the next Bitcoin Cash hard fork is due to take place on May 15, 2019. Specifically, shortly after 12:00 PM UTC that day, the network is scheduled to upgrade.
While media attention concerning the event has remained relatively low key, especially given the recent developments relating to Tether, an unknown miner going by the name Satoshi Nakamoto has been mining cryptocurrency again. As per the data by Coin.Dance, this particular miner is currently in control of close to 40% of the Bitcoin Cash (BCH) hashrate. As alluded to by some reports, some have speculated that this is the beginning of the second chapter of the hash wars. The reason why such a high hash rate dominance is important is that when a miner acquires 51% of a blockchain’s hashrate, they can launch double-spend attacks – essentially stealing Bitcoin Cash coins.
Finally, prominent crypto figurehead and the founding partner of Primitive Ventures, Dovey Wan, has tweeted that, according to sources, Bitfinex is planning an exchange token sale + IEO, with a view to raise $1B in USDT. On any other day, such a move would indeed be welcomed, however, given the recent allegations, an Initial Exchange Offering (IEO) at this stage would raise even more alarm bells.
Thank you for reading,
The BeQuant’s Analytics team