Issuance of Tether Stablecoin (USDT) No Longer Affecting Crypto Markets

A recently released report cited by Bloomberg states that the new issuance of Stablecoin Tether (USDT-USD) has not impacted the prices of major cryptocurrencies like Bitcoin (BTC-USD) lately. The study was done through the University of Texas. The study says that Tether indeed played a key role in manipulating or stabilizing prices, but now main affects smaller cryptocurrencies and not the larger ones.

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Manipulation using Tether

According to the University of Texas paper, Bitcoin prices spiked and reached an all-time high of $20,000 only because of price manipulation. The publication says that the manipulation involved Bitfinex, the sixth largest virtual currency exchange, and Tether. Bitfinex is Tether’s only direct client. In its report, Bloomberg said that the paper studied around 87 examples to find out the truth as to whether Tether purchases indeed made an impact on Bitcoin prices or not. The researchers conducted the study on purchases made in between March 2017 and March 2018.

The paper stated that the findings during this period accounted for only 1 % of the time and the amount to around 50% of BTC’s compounded return. A recent research paper published by Chainanalysis, a blockchain research firm stated that Tether now largely impacts the small cryptocurrencies prices such as EOS and NEO. However, the research article stated that its impact on major virtual currencies such as Ethereum (ETH), Bitcoin, and Litecoin (LTC) was not much anymore.

Tether issues new tokens worth $50 million

Tether issued new tokens worth $50 million on August 11 this year. Prior to that Tether released $300 million USDT tokens in late March priced at $1/token. In the last 30 days the market capitalization of this token has come down to $2.4 billion from $2.7 billion in the middle of July 2018. As of now, Tether stands next to Bitcoin at second place in highest daily trading volume terms with $4.2 billion worth of trades per day. An average 24-hour trading volume of Bitcoin is $5.7 billion. Both Tether and Bitfinex have been accused of lack of transparency as they have failed to submit a public audit.

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