Bitfinex announces margin trading for Tether [USDT] with USD pair
Bitfinex, one of the leading exchange platform around the world, has been on the cryptocurrency space radar because of Tether [USDT] for several months now. The supposed stable coin has been accused of not have the USD backing it claims to have, leading the coin in losing its peg against the dollar on several notes.
This also resulted in the exchange platform taking the hit from the majority of the market, because of its support to the stable coin. However, the exchange has lately been in the spotlight because of its decisions related to the cryptocurrency.
Earlier today, Bitfinex announced that they have opened margin trading for the coin, pairing it against the US dollar. The aim of the exchange behind this new trading option is stated to be the improvement of their stable coin offering “in line with market evolution and consumer demand”.
They said in their official announcement:
“Today, adding margin trading on USDT/USD pair will not only allow for more efficient price discovery, but in an important move for risk management, unlock the ability to hedge the exposure taken on stablecoins. Along with a dedicated lending market, USDT will be available as collateral for margin positions.”
In general terms, margin trading refers to a trading option that allows uses to open a position with leverage, borrowed money that can be used to trade on an exchange. The exchange will loan coins to users and, in turn, makes the profit from the interest charged on the borrowed coins. With this feature, users can short sell and opt for a long position, based on their preference.
Additionally, the exchange has also announced that they will be opening margin trading for other major stable coins as well. They claimed to do this once the coins have gained enough liquidity in the market.
WhalePanda, co-host of Magical Crypto Friends, said on Twitter:
“Genius move by
@bitfinex. $USDT fudders can margin short it now and put their money where their mouth is.”
DaFlex, a Twitterati said:
“And if they are right they can…. errrrr I guess they can go f**k themselves cos bfx would collapse lol and if they are wrong they can close for zero movement…. pointless lol”
Jonas, another Twitterati said:
“Actually it makes much sense. Now its easy af to arbitrage between USDT and USD so price swings should be insignificant.”
Recently, the exchange platform announced their support to all the major stable coins on their platform and on Ethfinex. This includes TrueUSD [TUSD], Circle coin [USDC], Paxos [PAX], and Gemini Dollar [GUSD]. Along with this support, the platform stated that all the stable coins would be traded against USD. Prior to this announcement, the exchange opened up USD/ EUR market for the Tether.
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