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Major traders are reporting that they can’t go long on Binance at the moment because the exchange is out of(USDT).
In what may be a first, Binance seems to be running out of Tether and can’t meet demand on its margin trading services. Major traders were puzzled today when their placed longs were rejected due to the exchange simply not having the USDT to back up the loans.
BeInCrypto can confirm through private correspondence that one such major trader found himself unable to place a long on BTC/USDT. A similar situation was reported by cryptocurrency analyst Jacob Canfield (@JacobCanfield). He says that he can expect this shortage to last a few more days—so it might be smart to lock in some profits.
A moment of sobriety
dominance is approaching key support and we are seeing USDT loans running out on Binance.
I give this maybe a couple more days but I would recommend at least moving up stops or locking in some profit.
Keep killing it guys 🤜🤛
— Jacob Canfield (@JacobCanfield) February 12, 2020
As of this writing, neither Binance nor Tether Treasury has issued a statement on the USDT shortage. Although it might disrupt margin traders in the short-term, it does demonstrate that demand is exceeding expectations. It is possible that Tether Treasury may need to mint more USDT to account for the shortage or alternatively provide Binance with more liquidity via its existing reserves.
The situation is also strange considering that Teather Treasury did a rare USDT burn just a week ago. $102M worth of USDT was destroyed as part of redemptions into USD. However, it seems that Binance is now in dire need of funds, so it is unclear how Teather Treasury will respond.
The USDT shortage on Binance comes at a time when Bitcoin (BTC) and the cryptocurrency market at large has seen explosive gains. Bitcoin is currently up 2.28% on the daily, trading at $10,326 after a major leg up yesterday from $9,800. As the momentum builds up in anticipation of the halving event in May, the market is taking notice: the cryptocurrency market, as a whole, has hit the $300M market capitalization once again and is on a strong upward trend.
Hopefully, we can expect a formal comment on the matter from Binance shortly.
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