{"id":251184,"date":"2021-05-16T22:39:01","date_gmt":"2021-05-16T19:39:01","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/caitlin-long-reveals-the-real-reason-people-are-selling-crypto\/"},"modified":"2021-05-16T22:39:01","modified_gmt":"2021-05-16T19:39:01","slug":"caitlin-long-reveals-the-real-reason-people-are-selling-crypto","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/caitlin-long-reveals-the-real-reason-people-are-selling-crypto\/","title":{"rendered":"# Caitlin Long reveals the ‘real reason’ people are selling crypto"},"content":{"rendered":"

“# Caitlin Long reveals the ‘real reason’ people are selling crypto <\/strong>”
\n<\/p>\n

The founder and CEO of Avanti Financial is claiming Tether\u2019s recent disclosure about the stablecoin’s reserves may have contributed to the altcoin selloffs last week.<\/p>\n

In a series<\/a> of Saturday tweets, Caitlin Long said<\/a> that Tether Holdings Limited\u2019s breakdown of Tether\u2019s (USDT) reserves were not invested in \u201cshort-term, lower-risk, liquid securities,\u201d but rather credit assets of \u201cwho-knows-what quality.\u201d The Avanti CEO claimed traders may have felt compelled to sell other cryptocurrencies to reduce their total risk exposure, given that the stablecoin \u2014 ranked sixth with a $58 billion market cap \u2014 has the potential to bring down other tokens amid a credit market correction.<\/p>\n

\u201cIf Tether stays a de facto credit hedge fund by investing reserves this way, markets now can safely predict that Bitcoin and crypto prices will likely exhibit high correlation with credit markets,\u201d said<\/a> Long. \u201cThey will probably correct together.\u201d<\/p>\n

Long added that authorities may still choose to crack down on stablecoins following Tether\u2019s full reserve breakdown, but said the crypto industry could benefit from regulatory clarity:<\/p>\n

\u201cOne of the best things for industry at present would be getting stablecoins to be okay with U.S. regulators, especially the Fed and the SEC. Stablecoins are very important bridges between crypto and the U.S. dollar.\u201d<\/p><\/blockquote>\n

According to the Tether Holdings Limited report, 75.85% of USDT backing is formed by cash and equivalents, with commercial paper accounting for 65.39% of this category. Long claimed any potential fallout in markets \u201cwill have been entirely avoidable\u201d if Tether had invested more in Treasury Bills \u2014 only 2.94% out of its total cash, cash equivalents, other short-term deposits and commercial paper \u2014 rather than assets with seemingly higher risk.<\/p>\n

The CEO\u2019s comments come following the price of Bitcoin (BTC) dropping below $46,000 on some exchanges \u2014 the crypto asset is $45,818 at the time of publication, having fallen more than 20% in the last seven days. However, it\u2019s unclear what role Tether\u2019s disclosure may have played in the crypto market. Binance was also in the spotlight as a Bloomberg report claimed that the U.S. Justice Department and the Internal Revenue Service were investigating the crypto exchange for alleged \u201cillicit activity.\u201d<\/p>\n