Bitfinex Concerns Persist as Tether (USDT), Bitcoin (BTC) Wallets Keep Fluctuating

The Bitcoin cold wallet of Bitfinex loses another 3,000 BTC as banking woes hit the exchange again.

The Bitfinex exchange continues to rouse concerns, with its wallets showing an inflow of Tether (USDT) and outflows of Bitcoin (BTC). The latest 3,000 BTC left the cold wallet on October 12, with the number of USDT expanding at the same time to more than 251 million, up from 144 million on the previous day.

In the past few days, Bitfinex has seen large fluctuations in its USDT wallet, while the cold wallet storage reached levels from October last year at around 138,000 BTC.

There are transaction traces showing the movement of some of the USDT through private wallets into Bittrex and other exchanges.

In the past hour, a large transaction originated from the Bitfinex Tether wallet and finished at Bittrex through an intermediary wallet. There are other similar transactions. The Bittrex address “1DUb2YYbQA1jjaNYzVXLZ7ZioEhLXtbUru” is the sixth-richest on the Tether list. Huobi has also seen Tether inflows.

It is unknown where the Bitcoins have moved. In the past days, Bitfinex has denied rumors of being insolvent, but for now, the exchange operator may not have access to banking services after HSBC also abandoned it.

The Tether and Bitfinex treasuries currently have more than 500 million USDT combined on the exchange. Even more troubling is that the effective price of USDT has dipped below $1. BTC continues to trade at a premium of over $100 on Bitfinex, meaning a lower effective price for USDT.

If a redemption for US dollars is attempted, the price immediately drops, as evidenced by selling orders on Kraken in the past days and hours.

Despite reassurances of the safety of Bitfinex and Tether, some worry that if the system fails, it will trigger a crypto space crisis comparable to the Mt. Gox calamity.

Others dismiss the news as noise and irrational fears, but there are other indicators of lost trust. Some of the USDT funds are moving into other dollar-pegged coins, such as Paxos (PAX) and TrueUSD (TUSD), and the price of USDT is once again below the dollar mark.