The fall caused by a significant sell-off sees Bitcoin rise 8 per cent to $7,600.
The actively traded cryptocurrency Tether, reliant on its $1 peg, slips to $0.94.
The stable-coin is closely linked to the trading platform, BitFinex which recently parted with its banking partner, Noble Bank. Consequently, Tether has failed to perfrom a financial audit and has caused speculation that there is insufficient liquidity backing its value, according to numerous sources. Doubts there is enough capital to back the digital currency, investors undergo a major sell-off which sees a spike for Bitcoin and other stablecoins.
BitFinex saw Bitcoin’s price reach highs of $7,500 from $6,300 over the 24-hour period. The leading crypto has since stabilised, sitting around $6,800 on BitFinex’s platform.
Tether was said to be more stable and less volatile than Bitcoin because of each coin being backed by the dollar. Being stable means investors can easily trade fiat money for the cryptocurrency enabling them to easily trade between exchanges and other crypto platforms.
Tether is Bitcoin’s closest competitor regarding number of trades according to the Washington Post and has a $2.4bn market cap.