https://i.postimg.cc/W3Z8Fvsk/hedge-fund.jpg

# Bitcoin and the rest of the crypto markets have seen a little boost over the past 2 days.

The question is though, are we seeing real buying due to demand for bitcoin, or something else?

Unfortunately, I believe it is mostly that something else category, though not entirely.

I actually hinted at what might be causing it in my post yesterday.

It can be seen here:

https://steemit.com/tether/@jrcornel/tether-starting-to-lose-its-peg

# What is going on?

Likely we are seeing the after affects of tether starting to lose its peg.

Everyone has been calling for this for a long time yet it hadn't really happened yet, until 2 days ago.

Tether plunged as low as $.92 on coinmarketcap (much lower on the Bitfinex exchange) and we saw significant money flowing out of tether for the first time in a long time.

https://i.postimg.cc/k4Y18cb0/chart.png

(Source: https://coinmarketcap.com/currencies/tether/)

Sounds like bad news for crypto markets, right?

Wrong.

You see, when someone sells tether, in most cases they must buy bitcoin or ether because those are the two currencies that tether is most often priced in.

Which means, any selling in tether would result in buying in bitcoin or ether.

So, if you get a sell off in tether, you likely get a pop in bitcoin and ether, which also likely helps pull up the rest of the crypto markets as well because most every other coin is priced in either bitcoin or ether.

Unfortunately, much of this money will likely eventually find its way back into another stable coin or fiat since that is where it wanted to be in the first place.

Which means, the pop in prices may be short lived.

# However, there is likely some real demand as well.

That being said, there is likely some real demand as well, though likely not nearly to the extent of money just moving out of tether.

There has been some significant news announcements of late.

None of them bigger than this one:

https://www.cnbc.com/2018/10/15/fidelity-launches-trade-execution-and-custody-for-cryptocurrencies.html

Fidelity announced a custody solution for institutions as well as opened the door to many more investors.

From Fidelity CEO Abigail Johnson:

> “Our goal is to make digitally native assets, such as bitcoin, more accessible to investors."

(Source: https://www.cnbc.com/2018/10/15/fidelity-launches-trade-execution-and-custody-for-cryptocurrencies.html)

On last check, Fidelity has roughly $7.2 trillion in client assets.

# Conclusion:

- Much of the recent pop is likely due to money flowing out of tether and into bitcoin and ether.

- However, I don't expect this little bounce to be fully reversed as that money eventually makes its way back into other stable coins because...

- There has been some great news coming out over the past week, none bigger than Fidelity getting involved in the crypto space.

Stay informed my friends.

Image Source:

https://hacked.com/last-years-crypto-boom-was-fixed-researchers/

Follow me: @jrcornel