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Analysts say Bitfinex gets ETH moving and suggests Tether Ethereum “eats”

May 18, 2020

Cryptocurrency exchange Bitfinex has significantly increased the amount of ether (ETH) that has accumulated on the platform and analyst Elias Simons said as The fact is not an accident.

Based on data provided by the Blockchain Glassnode analytics service, Simos Bitfinex said The company has increased its holdings in Ethereum (ETH) since March:

“Bitfinex now stores more $ ETH than the entire DeFi system. Since mid-March The ETH balance at Bitfinex has increased from 2.5 million to 4 million ETH. During the same period, 3B Tether was printed on the Ethereum chain. Tether eats Ethereum …? “

Simos found that there is more ETH on the platform than on the entire DeFi.

Analysts say Bitfinex gets ETH moving and suggests Tether Ethereum “eats”
Analysts say Bitfinex gets ETH moving and suggests Tether Ethereum “eats”

DeFi is a new financial system with which traditional products such as loans and savings accounts can be created decentrally. The technology is now considered by experts to be one of the great use cases of the Ethereum network.

Bitfinex’s Ethereum (ETH) balance sheet rose by almost 60% and reached an impressive 4,000,000 ETHs. This number is significantly higher than that of the entire DeFi sector of the network.

This process of ETH accumulation on the platform takes place simultaneously with the printing of tether (USDT) in the Ethereum (ETH) network.

USDT is a stable currency, the value of which is pegged to the dollar. As traders deposit money into exchanges to enter the cryptocurrency market, Tether prints more USDT.

USDT is available in various blockchains: Omni, Ethereum, Tron and Algorand.

Previously, the ERC-20 (Ethereum) version of USDT was considered a weak copy of the original version of the Omni network (based on Bitcoin), but eventually the Ethereum (USDT) network Tether outperformed its predecessor.

There are currently 6 billion USDT Ethereum (ETH). Almost half of this impressive amount was put into circulation after March.

Elias Simons offered three possible explanations for this process, which are associated with a decrease in Bitfinex’s Bitcoin balance.

This can mean that Bitfinex is preparing a large-scale participation in the new network validation system Ethereum 2.0 (ETH).

The new version of Ethereum aims to transfer the network to the consensus system known as proof of participation. where transactions are validated using funds allocated online by participants.

Another reason could be Bitfinex’s intention to set better interest rates for participants in the ETH2.0 network than in the DeFi market.

At the end Bitfinex could store ether (ETH) to cover the gas costs (ETH network transmission fees) for the maintenance of the existing ERC-20 based tether on the platform.